1951-02-26

PRIVATE BILL


[Stage Direction]
Bill No. 75, to incorporate Trans-Canada Pipe Lines Limited.-Mr. Decore.

Hon. Alphonse Fournier (for fhe Minister of Transport) moved: the first reading of Bill No. 76 (from the Senate) to amend the Radio Act, 1938.
Motion agreed to and bill read the first time.



INQUIRY AS TO SELLING PRICE IN ALBERTA AND BRITISH COLUMBIA

[Stage Direction]
On the orders of the day:
Mr. E. D. Fulton (Kamloops):: I wish to direct a question to the parliamentary assistant to the Minister of Agriculture. Will he say whether it is a fact that the dairy products board has permitted an increase in the selling price of butter in the province of Alberta, based on an increase in the price per pound of butterfat, but has refused to authorize a corresponding increase in British Columbia? If so, will the parliamentary assistant look into the reasons and give us an explanation at the first opportunity?


Mr. Robert McCubbin (Parliamentary Assistant to the Minister of Agriculture):: This, Mr. Speaker, is something we have not heard of in our department. We are offering butter at 57 cents, basis Montreal. A spread of four cents is allowed to take care of handling, making into prints, and so on, bringing the figure to 61 cents. But neither I nor the department have heard that any ceiling has been placed upon the current make of butter. It is of course understood that the current production may be sold for whatever the trade likes. But the butter that is placed out by the government is 61 cents a pound, and I do not think you will find there is any difference between Alberta and British Columbia in this respect.


Mr. Jones:: I should like to direct a supplementary question to the parliamentary assistant to the Minister of Agriculture. The answer given by him was not very satisfactory, in view of the fact that I was in touch with British Columbia this morning and there is a variation of ten cents in the price of butterfat between Alberta and British Columbia. Will the parliamentary assistant investigate the matter and see that something is done?


Robert McCubbin: Yes; that is being done now.



DEFENCE SERVICES PENSIONS


[Stage Direction]
On the orders of the day:
Mr. G. A. Cruickshank (Fraser Valley):: I should like to direct two questions to the Minister of National Defence, of which I have given notice. What steps are being taken to have all members of the permanent force elect to contribute to the pension fund under the Defence Services Pension Act, form 1 and form 1A? When a soldier does not have the information required, will this be supplied by the paymaster or other officials?


Hon. Brooke Claxion (Minisier of National Defence):: In answer to the first question, last year the three services called the attention of all units to a general order to give effect to the amendments adopted at the last session; and required commanding officers to give a certificate that every member of the unit under his command was, by December 1, 1950, advised of the additional opportunities presented as a result of the amendments to the Defence Services Pension Act. In addition, follow-ups have been sent by the chairman of the personnel members' committee to the officers commanding commands and formations both in Canada and outside, calling this to their attention.
With regard to the second question, the form, as the hon. member has pointed out to me privately, is necessarily complicated, and every man is given assistance in filling it out. It is quite unlikely that any man would have the information necessary to fill it out without access to the regimental and other records. The usual practice is for the form to be filled out by the paymaster or other appropriate officer working with the man, who then reads the form, makes his election, and signs the form.

Inquiries of the Ministry


George Alexander Cruickshank: I would like to ask a supplementary question. The minister gave me some of the information before. A soldier this morning in Ottawa signed the form but it was refused acceptance by his officer unless it was completed, even if not correctly filled out, on the assumption that it would be corrected later. What protection does the member of the forces have? It is directly contrary to the information given by the minister.


Brooke Claxton: I should be very glad to see that that is followed up, of course; orders have already been issued, and, apart from this one exception, I have not heard of any cases in which they have not been carried out.


George Alexander Cruickshank: Will the member of the permanent force be protected when his own officer probably has not this information?


Brooke Claxton: The man has to make his election by a certain date. If he has not the information, it is available in the recprds of the service. When the form is not properly filled out, it will be the responsibility of the service to see that it is properly filled out in time for the man to make an election.



HOUSING


[Stage Direction]
On the orders of the day:
Mr. G. F. Higgins (Si. John's East):: I
wish to direct a question to the Minister of Resources and Development. Is there a new federal housing scheme in St. John's, Newfoundland? If so, will the minister outline it?


Hon. Robert H. Winters (Minister of Resources and Development):: There is no
new housing project as such for St. John's, Newfoundland; but on Saturday last, February 24, Mr. Vardy, for the government of Newfoundland, and I signed an agreement with respect to a land assembly project under section 35 of the National Housing Act. This project will be developed on two parcels of land. One of them, called area "A", lies on the north and south sides of Elizabeth street, between Old Portugal road and Rennie's river. This area comprises 57 acres. The other is called area "C"; it extends south of Elizabeth street between Mayor avenue and Anderson avenue, and is bounded on the south by Empire avenue. This area comprises approximately 93 acres. The two areas are being developed as one project.
After provision has been made for streets, parks, recreational and commercial space, there will result from the land assembly project approximately 650 residential lots.
rMr. Claxton.]



TRANS-CANADA HIGHWAY INQUIRY AS TO STANDARDS ON NEWFOUNDLAND SECTION

[Stage Direction]
On the orders of the day:
Gordon Francis Higgins: I should like to direct another question to the Minister of Resources and Development. Has the government agreed to permit the Newfoundland section of the trans-Canada highway to be completed to standards lower than the rest of Canada?


Some hon. Members:: Order.


Robert Henry Winters: The government of Newfoundland is proceeding to build the trans-Canada highway under the terms of agreement that apply to all other provinces who have entered into agreement with the federal government.


Gordon Francis Higgins: No special arrangements have been made?


Robert Henry Winters: There is no special arrangement for the province as such. The general agreement carries in it a discretionary clause which allows for certain deviation where unusual difficulties arise.



INDIAN AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. William Bryce (Selkirk):: I wish to direct a question to the Minister of Citizenship and Immigration. Does the government intend to set up the Indian Affairs committee to consider the new bill?


Hon. W. E. Harris (Minister of Citizenship and Immigration):: Consideration is being
given as to the best means to facilitate the passage of the Indian bill through the house, and the government's intention will be made known in due course.



JAPANESE PEACE TREATY


[Stage Direction]
On the orders of the day:
Mr. Gordon Graydon (Peel):: I should like to address a question to the Secretary of State for External Affairs. Today's press dispatches contain news of the return of John Foster Dulles, the special representative of the United States government, who has been in the Far East for six weeks in connection with Japanese and other problems, and indicate that perhaps we are getting nearer to a treaty of peace with Japan. Has the Canadian government been kept closely in touch with the movements of Mr. Dulles and

others in that regard? May we expect a meeting soon with respect to a treaty of peace with Japan?


Hon. L. B. Pearson (Secretary of State for External Affairs):: We have kept in touch with United States government authorities in general, and with Mr. Dulles in particular, in regard to the possibility of &n early Japanese peace conference and a Japanese treaty, and through our officers in the countries that he visited on this journey we have had some reports on the discussions he had about these matters. We expect td be in touch with him directly in Washington within the next few days.
On the other question, about the possibility or otherwise of an early Japanese peace conference, I do not think it would be advisable for me to say anything at this time except there are indications that a Japanese peace settlement will be possible before very long.
Inquiries of the Ministry this morning's Montreal Gazette, attributed to a dietitian of that city, alleging that in many cases brown bread is not whole wheat bread but white bread dyed brown. Can the minister say whether there are any regulations coming under his administration that relate to such a practice?


Hon. Paul Martin (Minister of National Health and Welfare):: I have not seen the press clipping in question. If my hon. friend will send it over to me, I will give it my usual attention.


Mr. Knowles:: I would like to have something better than that.


Gordon Graydon: Have you any bread dyed pink?	[DOT]

SUGGESTED PROCEDURE IN REPORTING OF __ CASUALTIES
On the orders of the day:


Gordon Graydon: May I ask a supplementary question? I take it that in connection with this conference it will not be a conference in which Soviet Russia is represented.



QUESTION AS TO FINAL SETTLEMENT ON FIVE-YEAR POOL

[Stage Direction]
On the orders of the day:
Mr. J. A. Ross (Souris):: In the absence of the Minister of Trade and Commerce, I should like to direct a question to the Prime Minister. As a result of the trip last week to Great Britain by the Minister of Agriculture, is the government in a position to make a statement in respect to final settlement on the five-year wheat pool? If not, can either the Minister of Trade and Commerce or the Minister of Agriculture make a statement to the house at an early day on the result of negotiations?


Right Hon.  L. S.@: The Minister of Agriculture has not yet returned from the United Kingdom. I understand it is hoped that he will land in Montreal some time today and be here some time tomorrow. Therefore I can add nothing to the information that has already been communicated to the house.



REPORTED USE OF COLOURING MATTER IN PRODUCTION OF BROWN LOAF

[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: I should like to direct a question to the Minister of National Health and Welfare. Has his attention been called to a report in


Mr. T. H. Goode (Burnaby-Richmond):: Mr. Speaker, this morning's press carries reports that the Canadians have suffered casualties in Korea. The reports go on to mention the names of certain officers leading in the current attacks. I would suggest that this is likely to cause considerable concern to the families of those officers. Will the Secretary of State for External Affairs make representations to United Nations officials requesting that the names of individual Canadians in action in Korea be deleted from press reports?


Lester Bowles Pearson: Mr. Speaker, I would say that this would not be a matter for the United Nations as such, but possibly for the unified command, as the agency of the United Nations in Korea. I should be glad to discuss with my colleague the Minister of National Defence whether it would be appropriate or otherwise for the government to make representations on this matter.


Brooke Claxton: Mr. Speaker, I should supplement what was said by the Secretary of State for External Affairs about the reporting of casualties. We have asked the Canadian press not to report the names of Canadians suffering casualties. This is in accordance with the practice which we followed in both world wars, of endeavouring, by every means humanly possible, to get word to the next of kin first, before there was any mention of the names of those suffering casualties. In this our practice differs from that of some other countries, but we think our practice is right. We have asked that this be done, and it is being done.

Private Bills-Divorce
With regard to mention of individual officers in connection with actions, there is no doubt that that will cause anxiety to the next of kin of the officers mentioned. On the other hand, in the interests of keeping the Canadian people informed, it is desirable that as full a report be given of the actions engaged in as can properly be done without either giving comfort and assistance to the enemy or causing anxiety to the next of kin of the individuals concerned.
How this is to be done must be in part a matter of individual judgment and good practice, and I ask the co-operation of press correspondents in seeing that neither one thing nor the other is done-and this in addition to any rules of censorship, in respect of which we are working completely under the unified command. Because of this our press correspondents have to comply with precisely the same censorship provisions as other correspondents.



PUBLIC BUILDINGS


Alphonse Fournier: Mr. Speaker, on Friday last the hon. member for Queens (Mr. McLure) asked when work would be commenced on the building to replace the science service laboratory at Charlottetown experimental station, which was totally destroyed by fire a short time ago. In reply I would say that plans for this building are substantially completed, and it is expected that specifications will be commenced the first week in March.



PRIVATE BILLS


[Stage Direction]
Bill No. 41, for the relief of Martin Raymond Quinn-Mr. Winkler.
Bill	No.	42,	for	the	relief	of	Kathleen
Beatrice Denman Blackadar-Mr. Winkler.
Bill No. 43, for the relief of Dora Green-well MacKinnon-Mr. Winkler.
Bill No. 44, for the relief of Albert Edouard Desjardins-Mr. Winkler.
Bill	No.	45,	for	the	relief	of	Raymond
Boyer-Mr. Winkler.
Bill No. 46, for the relief of Aline Alina Buka Allaire-Mr. Winkler.
Bill	No.	47,	for	the	relief	of	Margaret
Beatrice Tynan Dossin-Mr. Winkler.
Bill	No.	48,	for	the	relief	of	Kathryn
Louise Morrison Ralston-Mr. Winkler.
Bill No. 49, for the relief of Gerald Tudor Parrott-Mr. Winkler.
Bill No. 50, for the relief of Marie Leontine Juliette Henriette Giguere	Fiset-Mr. Winkler.
rMr. Claxton.]
Bill No. 51, for the relief of Esther Marie Henning Ober-Mr. Winkler.
Bill No. 52, for the relief of Elmsley Alexander Leftly-Mr. Winkler.
Bill No. 53, for the relief of Ruth Landan Goodman-Mr. Winkler.
Bill No. 54, for the relief of Yvonne Michaud Telford-Mr. Winkler.
Bill No. 55, for the relief of Edward Albert Flewitt-Mr. Winkler.
Bill No. 56, for the relief of Mary Margaret Lillian Phillips Campeau-Mr. Winkler.
Bill No. 57, for the relief of Mary Zientek Latkowski-Mr. Winkler.
Bill No. 58, for the relief of Olga Kushner Dolny-Mr. Winkler.
Bill No. 59, for the relief of Joseph Taite Connor-Mr. Winkler.
Bill No. 60, for the relief of Doris Domi-niqua Sernuk War dell.-Mr Winkler.
Bill No. 61, for the relief of Ann Galganov Schwartz.-Mr. Winkler.
Bill No. 62, for the relief of Doris Mayoff Weinstein.-Mr. Winkler.
Bill No. 63, for the relief of Jean-Maurice Martel.-Mr Winkler.
Bill No. 64, for the relief of Ann AstrofE.- Mr. Winkler.
Bill No. 65, for the relief of Margaret Elizabeth Audrey Midgley Bennett.

Mr. Winkler.
Bill No. 66, for the relief of Kathleen Agnes Margaret Saddleton Pout Boon.-Mr Winkler.
Bill No. 67, for the relief of Bill Oleschuk. -Mr Winkler.
Bill No. 68, for the relief of Eileen Haswell Houghton.-Mr. Winkler.
Bill No. 69, for the relief of Saul Samuel Goldsmith.-Mr. Winkler.
Bill No. 70, for the relief of Brigitte Dorothea Felicity Gutmann Lowenbach Brooks.-Mr. Winkler.
Bill No. 71, for the relief of Violet Edith Hack Findlay.-Mr. Winkler.
Bill No. 72, for the relief of Cerna Segall Bercovitch.-Mr. Winkler.
Bill No. 73, for the relief of Paulette Charbonneau Lanthier.-Mr. Winkler.
Bill No. 74, for the relief of Ernest Churchill.-Mr. Winkler.

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)

Mr. Coldwell:: 1.	How many soldier settlers paid outstanding balances due the federal government after passage of order in council No. 3077?

2.	How many soldier settlers had their mineral rights restored as a result of passage of order in council No. 3077, and the minister's statement thereon?


Mr. Mulch:: 1.	Subsequent to June 23, 1950, the date of order in council P.C. 3077, 209 soldier settlers repaid their indebtedness. Of these, 104 obtained title to their farms with assistance under the order in council; 105 obtained title without such assistance.
2.	Of the 104 settlers mentioned in part 1, nine are known to be eligible to receive a grant of mineral rights. Of these nine, seven grants are in process of issuing; application is awaited from the other two settlers. In addition to the aforesaid nine cases, the titles held by the director of soldier settlement are silent in eighteen cases as to the ownership of the mineral rights; a search of registry office records in this regard will be completed by the district superintendents as soon as possible. In the remaining 77 cases, only the surface rights were conveyed to the director of soldier settlement.


CANADIAN ARMY SPECIAL FORCE
Mr. Pearkes:: 1.	How many officers and men, enlisted in the special Korean brigade, have subsequently been discharged?
2.	(a) For what reasons were these discharges made? (b) How many officers and men have been discharged under each of these categories?
3.	How many officers and men originally enlisted in category A have now been placed in lower medical categories?
4.	How many officers and men of the special force are in receipt of disability pensions from world war II?


Mr. Blanchette:: 1.	There have been 3 officers and 1,003 other ranks discharged to date.
2 (a) and (b).
Reasons for Discharge	Numbers
Officers
Resignation	 3
Other ranks
Attested but not finally	approved 97
Irregular enlistment	 81
Unlikely to become efficient		346
Misconduct	 14
Medically unfit	 455
Other reasons	 10
Total	 1,003
3.	No officers and 278 other ranks have had medical category lowered from A since enlistment.
Questions
4.	Information not immediately available. To obtain it will necessitate the review of approximately 10,000 individual files in the Department of Veterans Affairs.



CANADIAN NATIONAL RAILWAYS


Mr. Lennard:: 1.	How {nany statutory holidays are allowed the maintenance of right of way employees of the Canadian National Railways per year?
2.	How many are they allowed with pay?


Mr. Benidickson:: The Canadian National Railways advise as follows:
1.	Four. The current wage agreement governing the services of maintenance of way employees lists the following statutory holidays: New Year's day, Dominion day, Labour day, Christmas day.
2.	None, except as indicated in next paragraph. The rank and file of employees in the maintenance of way department, if required to work on any of the "above-mentioned holidays, are compensated at time and a half of their regular wage rate.
Foremen in the department, regularly employed as such and having three years' seniority, are allowed pay for the above-mentioned holidays if they are not required to work on those days. If they are required to work they receive time and one-half of their regular rate in addition to the initial day's pay.



TAX ON CAPITAL GAINS

Mr. Knowles:: 1.	Has the Department of Finance any information as to what rates of income tax are levied in the United States against increases in the value of stocks bought and sold on stock exchanges? If so (a) what are such rates; (b) what is the rate In the case of stocks held less than six months?
2.	Are there any taxes levied1 by the Canadian government comparable to any taxes indicated in answer to question 1?
3.	Is consideration being given by the Canadian government to the levying of such taxes on capital gains made on stock exchanges?


Mr. Sinclair:: 1.	Yes.
(a)	In the case of stocks held more than six months the regular tax rates apply to one-half the increase in value but the total tax is limited to 25 per cent of the total increase.
(b)	Same rates as other income.
2.	Where the purchase and sale of stocks is a business of the taxpayer he is taxed on his gains at the same rate as ordinary income. There is no special tax rate.
3.	It is not the practice to foreoast government policy in giving answers to questions.

Questions



ST. JOHN'S, NFLD., FEDERAL BUILDINGS

Mr. Higgins:: 1.	Have arrangements been made to erect or purchase a federal public building or buildings in St. John's, Newfoundland?
2.	If so, how many buildings are to be erected or purchased, and in what locations?


Mr. Fournier (Hull):: 1.	Negotiations under way.
2.	(a) It is proposed to construct -two new federal buildings in St. John's, Newfoundland, and to purchase one building, presently known as the health laboratories, from the provincial government of Newfoundland.
(b) It is proposed to erect the new federal building on a suitable site in upper town, and the second new building is to be erected in the immediate vicinity of the railroad station.
INCOME TAX-FARMERS-INSPECTORS Mr. Argue:
1.	What amount of income tax was paid by farmers in each province for each year from 1940 to 1949 both inclusive?
2.	How many income tax inspectors dealing with farm income tax were employed in each province for each of the above years?


Mr. McCann:: 1.	No information is available regarding the amount of tax actually paid by farmers. The amount of tax declared by farmers when filing income tax returns, by provinces, for the years 1941 to 1949 was as follows: -
Calendar year-	1941	1942	1943	1944	1945	1946	1947	1948	1949
	$		(Money figures in thousands of dollars)						
Newfoundland 	-	2Prince Edward Island .	17	11	49	42	44	5	38	21	4Nova Scotia 	36	26	88	90	67	33	123	72	33New Brunswick 	7	11	39	35	50	15	30	27	11Quebec 	24	74	165	199	223	14	79	94	51Ontario 	508	878	1766	2039	1656	1449	1720	2961	1940Manitoba	63	316	2188	2715	1469	1265	1597	1654	1585Saskatchewan 	433	814	3778	9246	5016	3299	4883	5875	6647Alberta 	364	915	2597	4877	3562	2570	4087	6639	7153British Columbia 	140	227	950	1240	1305	1193	1024	752	544Information regarding	1940	is not	available.	2.	The following statement shows the total number of assessors, field investigators, and clerical staff who were engaged in assessing, investigating and checking farmers' income tax returns in each calendar year from 1940 to 1949 inclusive:Province	1940	1941	1942	1943	1944	1945	1946	1947	1948	1949
Prince Edward Island .,
*	1	1	1	2	4	7
Nova Scotia 	
*
*	10	13
New Brunswick 	
*	*	*		*	10	10
Quebec 		
*	*		*	21	23
Ontario 	
*	22	23	30	43	76	92Manitoba 	.. . 2	2	2	10	16	22	26	31	36	36Saskatchewan 	*	10	38	45	56	71	74Alberta 	... 2	2	3	6	5	19	38	39	48	51British Columbia 	... 1	1	1	2	2	2	2	4	16	16
Note: (*) indicates that farmers' returns were not assessed by a separate staff.



TORBAY, NFLD., AIRPORT  INSTRUMENT LANDING EQUIPMENT

Gordon Francis Higgins: Has instrument landing equipment been installed at Torbay airport in Newfoundland?


William Moore Benidickson: It is planned to commence installation of equipment in the very near future, but the project cannot be fully completed until midsummer 1951.



PRIVATE T. A. PATERSON

Mr. Knight:: 1.	Was private T. A. Paterson, L/800134, injured while on active service with the Princess Pats?
2.	If so, on what date and what was the nature of his injury?
3.	Did bone shattering occur?
4.	Has grafting or other operation been prescribed?
5.	Has he been in a cast since wounded?
6.	Is his wound considered as a minor injury?

7.	Where is this soldier now?
8.	Have the United States authorities applied to the Canadian authorities to have him transported to Canada? If so, with what result?
9.	Has his pay been kept up to date while in American hands?
10.	Has his next of kin been notified by the department of defence?
11.	If so, on what date?
12.	If not, for what reason?
13.	Have any complaints been received in regard to the case of this soldier?


Mr. Blanchette:: 1.	Yes,
2.	On 23rd December, 1950. Nature of injury, reported, "gunshot wound left thigh".
3.	Medical report would indicate bone is broken or crushed.
4.	Not known, as medical documents have not as yet reached army headquarters.
5.	Pte. Paterson wore a leg cast on left leg for movement to the United States, which was removed on 4th February, 1951, and leg placed in traction.
6.	His condition was not reported by either British or American medical authorities as serious or dangerous. Latest medical report states present condition good, with patient being brisk and alert.
7.	In Madigan Army hospital, Fort Lewis, Washington.
8.	No.
9.	Yes.
10.	No notification.
11.	Not applicable.
12.	Although all classifications of battle casualties are reportable to next of kin, nonbattle casualties, until this case, were only reported in cases of death, serious and dangerous illness, amputations, blindness and mental illness. In the future cases of this kind will be reported to national defence headquarters and notified to next of kin.
13.	The Canadian Legion and Mr. John Diefenbaker, M.P., made inquiries.



BUREAU OF STATISTICS


Mr. Pouliot:: 
Mr. Mcllraiih:: 1.	Yes.
2.	September 24, 1945. Referred to the dominion bureau of statistics by the civil service commission, veterans' unit.
3.	Yes. Not available in the dominion bureau of statistics.
4.	See Canada Gazette, July-September, 1946, p. 6284.
5.	Age, 34; education, B.A., Ottawa university; occupation, with Canadian army.
6.	June, 1942 to September 1945-CVSM with clasp, defence medal, 7th LAA regt. R.C.A.



CANADIAN FORCES


Mr. Higgins:: 1.	What is the present strength, officers and men
respectively, in Newfoundland, of (a) Royal Canadian Navy:	(b) Royal Canadian Air Force; (c)
Canadian army?
2.	What reserve units of the said units are in Newfoundland ?
3.	What are the respective strengths of the reserve units?


Mr. Blanchette:: 1.	Officers Men Total
(a) R.C.N	2	15	17(b)l. R.C.A.F	, 7	20	2. R.C.A.F.	(Goose Bay)..	38	305	Total R.C.A.F..	45	325	370(c) Army	11	43	542.	The following reserve units are in Newfoundland:(a)	R.C.N.-Naval division H.M.C.S. Cabot(b)	R.C.A.F.-Reserve medical unit, Saint John-recently authorized, in process of activation(c)	Army-R.C.A. 166 (Nfld.) regiment
R.C.E. 56 Independent field squadron
R.C.I.C. Royal Nfld. regiment
3.	Officers	Men	Total(a) R.C.N	.. 10	42	52(b) R.C.A.F	. . 	-	-(c) Army 	. . 43	381	424



BUREAU OF STATISTICS


Mr. Pouliot:: 1.	What is the personnel of the Montreal branch of the dominion bureau of statistics?
2.	What is the name of each employee of the said office, his age, education, experience and military record, and what are his administrative duties?
3.	Since January 1, 1951, what is the amount of travelling expenses of each employee?

Questions


Mr. Mcllrailh:: 1 and 2.
St-Jean, Roger, age 34, L.S.P. (U. of M.). Experience: Clerical, 6 yrs., Dept. Nat. War Serv., 3 yrs., Dept. Nat. Defence, 3 yrs. Military record: March 1943 to June 1946, CVSM. Duties: Regional stat. officer.
Leblanc, Arsene, age 34, B.Sc. (Ste. Annes). Experience: Que. United Fishermen district mgr., 4 yrs. Military record: none. Duties: Assistant regional stat. officer.
DeVilliers, Marie, age 42, High school graduate. Experience: Robt. Simpson Co. Sup. receiving and pricing merchandise. Military record: none. Duties: Prices representative.
Zappa, Paul, age 35, High school, Norm, school. Experience: Dept. Agri., 1 yr., Dept. Mines & Res., 1 yr. Military record: September 1939 to December 1945, CVSM & clasp, Defence Medal. Duties: Field officer.
Brunet, Fernand, age 30, Jr. matric., Tech, school. Experience: Dept. Vet. Affairs, 5 yrs. Military record: January 1942 to April 1945, CVSM & clasp, Defence Medal, Italy Star. Duties: Field officer.
Robidas, Marcel, age 27, B.Sc. (U. of M.). Experience:	Clerical, 3 yrs., Dept. Nat.
Defence, 3 yrs. Military record: August 1943 to June 1946, CVSM & clasp, Fr. & Ger. Star. Duties: Field officer.
Vaive, Maurice, age 27, Grade 10. Experience: Dept. Nat. Defence, 4 yrs. Military record: June 1941 to November 1945, RCNVR. Duties: Field officer.
Lelievre, Carmen, age 24, Prim, school, Comm, school. Experience: Secretarial, several firms, 3 yrs. Military record: none. Duties: Secretary.
3.
St-Jean, Roger, Sickness survey and civil service examining board, $22.30; Census conference in Ottawa, $85.50; Interviewing census field supervisor candidates, $45.39.
Zappa, Paul, Labour force survey and interviewing census field supervisor candidates, $127.36; Labour force survey collection of delinquent returns, $71.53.
Vaive, M. J., Labour force survey, $78.65.
Brunet, F., Labour force survey, $90.90; Interviewing census field supervisor candidates, $5.80.
Leblanc, A., Interviewing census field supervisor candidates, $44.24.



GRANTS TO MUNICIPALITIES

Mr. Pearkes:: 1.	What municipalities have received grants under die Appropriation Acts of 1949?
2.	What amounts have been paid in each case?
[Mr. Pouliot.l


Mr. Sinclair:: Grants in lieu of general and school taxes under the 4 per cent formula
1949-50	1950-51
appro- appro-
Nova Scotia Amherst 	
Halifax 	
Pictou 	priation priation ... $ 6,646 . . . 197,394 ... 2,690New Brunswick Moncton 	
Saint John 	... 23,161 ... 42,210Quebec Lauzon 	... 2,324Ontario Little Current .... Ottawa 	... 2,195 ....$ 200,000 762,392British Columbia Esquimalt 	,... 19,175Grants in lieu of general and school taxes on newly acquired properties	New Brunswick Moncton 	... 267Ontario Township of Ops .	.... 41Saskatchewan Regina 	
658British Columbia District of Maple Ridge	
126
Grants in lieu of special assessments
for local	improvements	
Nova Scotia		
Halifax 			11,095
Quebec		
Hull 			46,939
Three Rivers ....		128
Ontario		
Belleville			1,716
Kingston 			430
London 			4,164
Toronto 	 Woodstock 		....$ 334	8,874
Manitoba		
Neepawa			134
Winnipeg			21,207
Saskatchewan		
Kindersley 			403
Moose Jaw			53
Nipawin 			300
Regina 			6,304
Saskatoon 				417

Grants in lieu of special assessments for local improvements-cone. Alberta
Calgary	 $	391
Edmonton	 5,042
Red Deer	 968
British Columbia
District of
Maple Ridge	 54
Prince George	 312
Vancouver	 172



$ 200,334 $1,168,382   CIVIL SERVICE-INCREASES IN SUPERANNUATION IN OTHER COUNTRIES

Mr. Pearkes:: 1.	Has the civil service commission carried out any investigation, or has it any knowledge as to whether or not any British commonwealth countries, or foreign countries, have increased the superannuated pay to their retired civil servants?
2.	If so, what increases have been granted, and on what grounds were the increases made?


Mr. Bradley:: In so far as the civil service commission is concerned, the answer is as follows:
1.	No.
2.	Answered by No. 1.



LAVAL UNIVERSITY EMPLOYMENT COMMITTEE

Mr. Pouliot:: 1.	What is the personnel of the Laval university employment committee, at Quebec?
2.	What is the name of each member of the said committee, his age, education, experience and military record, and what are his duties?
3.	Since January 1, 1951, what is the amount of the travelling expenses of each member of the said committee?


Mr. Cole (Verdun-La Salle):: 1.	The Laval university employment committee at Quebec is a student body formed for the purpose of assisting graduates and students to plan employment, and one member of the unemployment insurance commission, by invitation, sits with the committee and counsels the students.
2.	The personnel of the group changes and is not under the jurisdiction of the unemployment insurance commission, nor has the commission the names of the student members.
The following is the information requested regarding our employee:
Wilfrid Racine; aged 40; junior matriculation; 15 years army, for the most part in administration and personnel selection work; with our Quebec local office since December 1945 as an employment and claims officer
Questions
grade 3; served overseas, discharged August 1945; presently captain and personnel selection officer for reserve army; his duties in the Quebec local office of the unemployment insurance commission include all work in connection with placement of university students at Laval university.
3.	Nil, including our employee.



RURAL MAIL COURIERS


Mr. Kickham:: What amount per mile is paid to rural mail couriers in each of the provinces of Canada?


Mr. Langlois (Gaspe):: Average cost per mile per annum based on six trips per week
Postal district Vancouver .. Edmonton . . .
Calgary	
Saskatoon ... Moose Jaw . Winnipeg .. .
London	
Toronto	
North Bay ..
Ottawa	
Montreal ....
Quebec	
Saint John ..
Halifax	
Charlottetown
Newfoundland
	$ 71.53
	 60.41
	 56.48
	 60.02
	 62.36
	 60.08
	 52.27
	 54.49
	 57.92
	 49.44
	 51.72
	 52.77
	 51.45
	 55.54
	 53.18
(no rural routes)
Average cost per mile
Cents
Vancouver .. Edmonton ...
Calgary	
Saskatoon ... Moose Jaw .. Winnipeg ...
London	
Toronto	
North Bay ..
Ottawa	
Montreal ....
Quebec	
Saint John ..
Halifax	
Charlottetown
Newfoundland
	 22-8
	 19-3
	 18-0
	 19-2
	 19-9
	 19-2
	 16-7
	 17-4
	 18-5
	 15.8
	 16-5
	 16-9
	 16-4
	 17-7
	 17-0
(no rural routes)



MARITIME MARSHLAND REHABILITATION

Mr. Kickham:: 1.	In what bodies of dikelands in the province of Prince Edward Island were moneys expended pursuant to the provisions of the Maritime Marshland Rehabilitation Act?
2.	How much money was expended on each of such bodies up to December 31, 1950?

Questions


Mr. McCubbin:: 1.	Johnston river marsh.
2.	$19,817.88.



DEFENCE CONTRACTS-MOTOR VEHICLE MANUFACTURERS

Mr. Thatcher:: 1.	Since June, 1950, have any defence contracts been placed with (a) Ford Motor company; (b) General Motors; (c) Chrysler motor corporation; (d) Studebaker of Canada?
2.	If so, what was the dollar value of contracts placed with each company?
3.	Has any of the equipment been actually turned over to the defence forces?


Mr. Mcllraiih:: 1.	Since June 1950, defence contracts have been placed with: (a) yes; (b) yes; (c) yes;
(d)	no.
2.	(a) $606,229; (b) $939,546; (c) $939,437; (d) nil.
3.	Yes.



BUREAU OF STATISTICS


Mr. Pouliot:: 1.	Has Mr. Saba (or Sapa or Zappa), of the Montreal branch of the dominion bureau of statistics ever lived in the town of Chicoutimi in the Saguenay district, or in the district of lake St. John? If so, where, when, and for what period on each occasion?
2.	How many persons does he know in the said town or districts, and what are their names?


Mr. Mcllraiih:: 1.	Mr. Paul Zappa was a school teacher at Normandin from January, 1932, to June, 1933.
2.	Question cannot be answered.




Mr. Pouliol:: 1.	Has Mr. Fernand Brunet, of the Montreal branch of the dominion bureau of statistics, ever lived in the county of Temiscouata? If so, where, when, and for what period on each occasion?
2.	How many persons does he know in the county of Temiscouata, and what are their names?


Mr. Mcllraiih:: 1.	No.
2.	Question cannot be answered.



CENSUS EXECUTIVE COMMITTEE

Mr. Pouliot:: What are the names of the members of the census advisory council at Ottawa, and what are the other duties of each member of the said council?


George James McIlraith: There is no such organization known as the census advisory council. The senior officers involved in taking the

census have formed what is known as a census executive committee as follows: Herbert Marshall (chairman), dominion statistician; J. T. Marshall, assistant dominion statistician; Nathan Keyfitz, senior research statistician; O. A. Lemieux, director, census division; A. B. McMorran, director, special surveys division; C. Scott, chief administrative officer; J. L. Forsyth, chief, agriculture census section; D. L. Ralston, chief, population census section.



WINNIPEG POSTAL COURIERS

Mr. Knowles:: 1.	What firms in Winnipeg have contracts for picking up the mail from postal boxes in the Winnipeg area?
2.	How many persons are employed by such firms as postal couriers?
3.	On what basis does the Post Office Department pay the contractors for this work?
4.	At what rate are the postal couriers working for the above firms paid?
5.	Do postal couriers in the Winnipeg area get paid for the total number of hours from the time they start working each day until the day's work is done, or are they paid only for the hours they are out on trips?
6.	Do postal couriers in the Winnipeg area get statutory holidays? If not, what rate of pay do they get when they work on statutory holidays?
7.	Do postal couriers in the Winnipeg area get any sick leave?
8.	Are they covered under any pension plan?


Mr. Langlois (Gaspe):: 1.	Mr. John Dykes, 146 Gouler street, Norwood.
2.	No information.
3.	At a per annum rate as a result of public tender based on detailed specifications showing frequency of collection, number and length of routes, hours of service, and any other information necessary to enable tenderers to determine their tender rates.
4.	Contract is executed on the basis of a wage rate for mail truck drivers of 90 cents per hour, which is the present prevailing wage rate for truck drivers in Winnipeg as certified by the Department of Labour.
5.	No information. The postal couriers are employees of the contractor.
6.	Holidays are covered in the contract by
the following provision:	"The contractor
agrees that the cost of all holidays or other leave with pay allowed or to be allowed by him to his employees or to which they are or will be entitled under agreement or under any rule of law which is in force at the time of entry into this contract has been taken into consideration by him in calculating the amount hereinafter agreed to be paid to him and that no increase in the said amount will be made by reason of the cost of any such holidays or leave with pay."

7.	The matter of sick leave for couriers is one that is decided by the employer-in this instance, the mail contractor.
8.	No information.



BURLINGTON, ONT., FEDERAL BUILDING

Mr. Lennard:: 1.	Was the contract for alterations to the federal building at Burlington. Ontario, by tender or on a cost plus basis?
2.	If on a cost plus basis, has the work been completed?


Mr. Fournier (Hull):: 1.	By public tender.
2.	Answered by No. 1.



POINTE AU PIC, QUE., CUSTOMS OFFICE   MR. MARTEL

Mr. Maliais:: 1.	Was a Mr. Martel employed by the Department of National Revenue at the customs office at Pointe au Pic during the last five years?
2.	If so, during what period?
3.	Was he dismissed or retired?
4.	If so, on what date, and for what reason?
5.	What was his classification and salary when he left the service?
6.	Did he avail himself of the sick leave period to his credit on termination of his employment?
7.	Does he receive a pension? If so, what is the amount of same?
8.	Who is the present incumbent in the above-mentioned position?
9.	When was he appointed, what salary does he receive, and what amount has he received by way of expenses since appointment?
10.	Does he receive a living allowance for his wife? If so, what amount?


Mr. McCann:: 1.	Yes.
2.	December 1, 1917, to April 23, 1950.
3.	Retired.
4.	April 24, 1950. On account of age and ill health.
5.	Collector of customs and excise, grade 1 port. Salary, $2,580 per annum.
6.	Partially, 4J months sick leave; 6 months retiring leave.
7.	Yes; $1,507.99 per annum.
8.	I. M. Rousseau, on loan from the port of Quebec, is acting collector.
9.	No permanent appointment has yet been made.
10.	No.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. Goode:: 1.	Was a caretaker recently appointed at Blair range, Vancouver?
2.	If so, on what date?
Questions
3.	Who received the appointment?
4.	Did he supply any references?
5.	If so, how many, and from whom?
6.	How many applicants were on the eligible list?
7.	Was a competition held?
8.	If so (a) on what date; (b) what are the names of those who qualified, and in what order?
9.	Did any of those eligible refuse the position?
10.	Were any veterans from North Vancouver eligible for this position?



PRINTING BUREAU EMPLOYEES


Mr. Knowles:: 1.	How many employees have left the government printing bureau during each month since July 1, 1950?
2.	What reasons have been given by these employees for leaving said employment?


Frederick Gordon Bradley: Return tabled.



MOTION FOR PAPERS


Mr. Gillis:: For a copy of all correspondence and other documents in the possession of the Department of Transport exchanged, in the period January, 1948, to December, 1950, between the provincial government of Nova Scotia and the federal government, concerning the proposal to build a bridge across the strait of Canso between the mainland of Nova Scotia and the island of Cape Breton.



BANK ACT


Mr. R. E. Anderson (Norfolk) moved:: That, in the opinion of this house, the government should take into consideration the advisability of amending the Bank Act so as to place farmers in the same preferred class as labour, particularly in relation to protection for payments of farm produce delivered for processing.
He said: Mr. Speaker, the idea of this resolution came to my mind in consequence of failures of certain canning companies in Ontario with a resulting loss to hundreds of farmers. These failures cost the farmers of Ontario roughly $400,000 in 1949-50, money that they cannot afford to lose. Often companies go into bankruptcy after farmers have delivered their crops and before they are paid for them.
When the canning companies make their contracts, normally their credit situation has not reached a large amount, but in some cases later on the companies transfer to the banks complete coverage of the stock. The banks thereby assume ownership of the produce without the knowledge of the grower who has provided the raw material, without

. Bank Act
which the whole structure cannot function. Yet at the present time he is the one who provides the basis of finance.
In southern Ontario this section of the act has recently cost the growers who provide fruit and vegetables for processing several hundreds of thousands of dollars, partly because the bank, because of its preferred position, may not have kept close enough supervision of the activities of the company. Agriculture is not contesting the right of labour to be in a preferred position, but it feels that agricultural products should rank equally. The actual situation is that the most some creditors can normally lose is the pay due at the moment, while a farmer might lose the major portion of his year's income, or at least the whole of his fruit and vegetable crop. This could quite easily spell the loss of his farm if it is encumbered, as too many are.
In essence the situation is that without the raw products no canning company could operate. The grower turns his products over to the canning company without sufficient guarantee of payment and without sufficient knowledge of the stability of the company. The evil sometimes goes further than that; for growers are induced to invest in the companies in order to have a market for their goods.
The bank advances money, often for the express purpose of purchasing the raw products, but it exercises insufficient supervision to see that the money is used for the purpose for which the credit is extended. Often the money is used for other purposes, and when the crash comes the growers are the worst sufferers. The bank takes a lien on the finished products, mainly on the assumption that the growers have been paid. This resolution is not directed toward labour, but rather toward the whole of the preferred list.
We have no wish to place the canning companies or labour in any worse position than they are now, because they have their own troubles; but we would like the assurance that once a crop is sold to a company there will be some guarantee in case of failure, that the farmers will be allowed to come along with the preferred class of creditors. I should like this house to know that the farmer receives three cents or less for the green peas that go into a can, and he must pay $28 per acre for seed, fertilizer, trucking, and also his own wages and labour and all other expenses. From a ton of peas for which the farmer receives approximately $57, including seed, there will be produced well over 2,000 twenty-ounce cans, and now the new fifteen-ounce can is being used. In the case of tomatoes, com and asparagus, the rates are about the same.

I have received supporting letters to which I should like to refer. I received a letter from a marketing board in Ontario with 22,000 grower members; another with 3,000 growers; from an association of 300 growers, another of 150, and one large association made up of 12,500 members. There may be some overlapping in the membership of those organizations, because some farmers belong to more than one. I have also received a letter from a co-operative in Quebec.
To illustrate what may happen: A man in Norfolk county lost $6,500 on one crop of pears. When the affairs of the company are finally wound up he may receive ten per cent. I realize that this matter involves a process of law with which I am not familiar and which I am not competent to discuss. My purpose in moving this resolution was to bring the matter to the attention of the government and this house. I know that the questions I have raised are considered when the Bank Act comes up for periodical revision; therefore I ask permission to move that the debate on this resolution be adjourned until a later date.
Motion agreed to and debate adjourned.



INCOME TAX


Stanley Howard Knowles: That, in the opinion of this house, the government should give consideration to the advisability of introducing legislation amending the Income Tax Act so as to permit taxpayers to deduct trade union dues, professional dues to teachers' organizations, and similar fees necessary to the earning of a livelihood, from their incomes before computing the amount of income tax to be paid.
He said: Mr. Speaker, the subject matter of this resolution has been before the house on a number of occasions. Mainly it has been brought to the attention of the house in the form of discussions and requests I have put to the Minister of Finance (Mr. Abbott) that the right set out in this motion be granted. On one occasion the subject matter of this resolution was before the house in the form of an amendment to the motion that Mr. Speaker do leave the chair for the house to go into committee of supply. That amendment was moved on October 31, 1949. It was debated on that day and then again on November 7, 1949. At the conclusion of the debate on the latter date a vote was taken and the amendment was defeated.
There are two differences between that amendment and the motion now before the house to which I should like to call attention. The first is as to the form of the motion, and

the other is as to the circumstances under which it is presented to the house. With regard to the form of the motion, I would point out that the amendment which was defeated on November 7, 1949, is found in Hansard at page 1292 and read as follows:
That all the words after the word "that" to the end of the question be struck out, and the following be substituted therefor:
"this house is of the opinion that the government should give consideration to the introduction of legislation amending the Income Tax Act so as to make it possible for taxpayers to deduct trade union dues from income before computing the amount of income tax to be paid."
The motion before the house today is almost the same as that, but there is an addition to which I should like to call attention. I shall explain later the reason for making that particular addition. The motion now before us reads:
That, in the opinion of this house, the government should give consideration to the advisability of introducing legislation amending the Income Tax Act so as to permit taxpayers to deduct trade union-dues, professional dues to teachers' organizations, and similar fees necessary to the earning of a livelihood, from their incomes before computing the amount of income tax to be paid.
As must be obvious to those who have been following me, the difference in form is in the addition of the words, "professional dues to teachers' organizations, and similar fees necessary to the earning of a livelihood." A little later in my remarks I shall explain why I have felt it desirable and advisable to include, along with trade union dues in general, a specific reference to' the fees that teachers pay to their professional organizations.
The other difference to which I should like to call attention relates to the circumstances under which this matter is placed before the house. When I presented it to the house on October 31, 1949, it was, as I have already indicated, in the form of an amendment to a motion to go into committee of supply. A number of members indicated to me privately that they supported the substance of my amendment on that occasion, but that since it involved voting a want of confidence in the government they had no alternative but to vote against my amendment. Personally I think that defence has been worn threadbare, but government members still resort to it. As a matter of fact on that occasion one member on the government side stated quite clearly in his speech that he supported the amendment, only to vote against it when the vote was called.


An hon. Member:: That is not unusual.


Stanley Howard Knowles: I see him laughing about
it now. I dare to hope that this year the hon. member for Kootenay East (Mr. Byrne)
Income Tax Deductions will both support the amendment and vote for it if a vote should be necessary. I point out that the motion before the house today is a substantive motion that stands on its own feet. It is not an amendment to anything the government has proposed. It does not involve a vote of want of confidence. It is a motion asking the government to give consideration to the advisability of the course requested therein.
Incidentally I am pleased that the opportunity has come to present the motion to the house well in advance of the budget. We have not yet even been told the date on which the Minister of Finance will present the budget, so this is -a good time to make suggestions to the minister as to the taxation changes that he might propose in the budget.
I have no doubt that he is receiving many suggestions from organizations all across the country. Surely the high court of parliament should take advantage of that opportunity, and, if it agrees with the views set out in the motion, pass it and thereby suggest to the Minister of Finance that he should give consideration to this proposal.
I have taken a moment or two to emphasize the fact that this motion is not to be construed as a want of confidence motion as was the case on October 31 and November 7, 1949, and I hope that members on the government side who agree with the substance and the spirit of the motion will decide, this time, to vote for it.
In presenting this request that trade union dues, teachers' professional fees and similar dues necessary for the earning of a livelihood be allowed as income tax deductions before the income tax to be paid is computed, I recognize that the amount of money saved by the individual taxpayer is not very great. But it is a matter of principle, and I argue for it on two main counts. On the one hand I contend that it is only fair play, for reasons that I shall spell out in a moment; and on the other hand I remind hon. members that time and again it is said by representatives of all political parties that trade unions play a very important part in the life of our country. That is said particularly when elections are looming. Great appeals are made to the trade union movement, stressing the importance of the part that they play in the industrial and economic life of our country. That being the case, it seems to me that we ought to take every step that we can to make the members of the trade union movement feel that they really are a part of the picture in this country. I suggest that the recognition of their dues as deductible for income tax purposes would be a proper step in that direction.

Income Tax Deductions
To go back to my first point, namely, that I feel it should be done as a matter of fair play, I would point out that as the Income War Tax Act stood in the years 1945, 1946 and 1947, doctors, lawyers and teachers were given the right in those years to deduct their dues to their various societies for income tax purposes. I emphasize the point that that right was accorded to those groups of people in 1945, 1946 and 1947, whether they were on salaries or whether their income was from fees. As a matter of fact that distinction was settled in the Bond case, which went to the Exchequer Court of Canada. Mr. Bond, a lawyer, was an employee of the corporation of the city of Winnipeg, and he was on salary. It was contended by the income tax officials that therefore his case was different from that of lawyers making their living from the fees that they charged, and the income tax department had denied him the right to deduct his fees to the law society for income tax purposes.
The exchequer court decided in Mr. Bond's favour and made it clear that as the law stood in the years 1945, 1946 and 1947 the groups of persons to whom I have referred were entitled to deduct their professional fees for income tax purposes, whether they were on salaries or on gross incomes from fees. It transpired later that trade unionists were similarly entitled, under the law as it stood in 1945, 1946 and 1947, to deduct their trade union dues for income tax purposes. I say it transpired later that they had that right under the law, but in point of fact they were denied that right by a ruling of the income tax department, even though the law gave it to them in 1945, 1946 and 1947.
The income tax department ruled that these people were in a different category, that their wages were to be treated as net, and that what they paid for trade union dues could not be deducted. As a result of that discriminatory decision on the part of the income tax department another case was taken to the Exchequer Court of Canada. I am referring now to the Cooper case, Mr. Cooper being a moving picture projectionist. Like the lawyer, Mr. Bond, to whom I referred a few moments ago, Mr. Cooper was also from the city of Winnipeg. The exchequer court made its decision with respect to the Cooper case in June, 1949, but the case was taken there in April, 1948. Let me jump ahead to the decision.
The decision of Mr. Justice Angers of the Exchequer Court of Canada was that as the law stood in 1945, 1946 and 1947, Mr. Cooper and his fellow moving picture projectionists should have been entitled to deduct their
trade union dues for income tax purposes, and the implication was that the same right extended to other trade unionists. Let me be perfectly fair, and say that there might have been some doubt as to whether it extended to all trade union dues, but certainly it was clear that it did extend to trade union dues in the case of those in closed shops, in union shops or in shops covered by the Rand formula.
The income tax department accepted the decision and announced in the fall of 1949 that any cases not statute-barred would be reviewed. That meant very little. It meant only that trade unionists who had actually applied for this reduction when they filed their returns for 1945, 1946 and 1947, if they met certain other conditions, might apply for a refund. As a matter of fact most trade unionists had not claimed their deduction for those taxation years because, despite what the law said, despite the fact that doctors, lawyers and teachers were making their deductions, the income tax department had ruled that this right did not extend to trade unionists. So it can be said for the income tax department that in the fall of 1949 they carried out the letter of the decision of Mr. Justice Angers, but it had very little effect.
What had happened in the meantime? As I say, the law was clear for 1945, 1946 and 1947, and it is clear now that the law should have extended to trade unionists the right that was extended in those years to doctors, lawyers and teachers. Mr. Cooper took his case to the exchequer court in April, 1948. By a strange coincidence, in May, 1948, only a month later, the government introduced amendments to the then Income War Tax Act. In 1948 we did two jobs in the field of income tax legislation; we amended the old Income War Tax Act for 1948, and we also passed a new Income Tax Act which was to come into effect on January 1, 1949.
We now find that, once it became law, the resolution introduced by the government in May, 1948, had the effect of denying for 1948 the right of trade unionists to claim trade union dues as a deduction, and it also had the effect of taking away that right from teachers, who had enjoyed it in 1945, 1946 and 1947. That explains why I have made special reference to teachers in this resolution. I believe they have a special word coming to them because of the way that right, which they enjoyed in the years I mentioned, was taken away from them so far as 1948 and subsequent years were concerned.
The same change made in 1948 drew a line right down the middle of two groups of people, doctors and lawyers. Previously all


doctors and lawyers had the right to deduct the fees they paid their associations. After the adoption of the amendment which was put through the house in 1948 those doctors and lawyers working for fees, working for individual patients and clients and collecting fees, paying expenses, office rent, help, and so on, still had the right to include among their deductions the fees they paid the medical or law society; but a doctor or lawyer who worked solely for a company and was on salary was not permitted to deduct his fees to the medical or law society. Frankly, my main concern in bringing this matter before the house is the case of the trade unionists and school teachers, but in all fairness I must say that I do not like the discrimination now made between these two groups of doctors and lawyers. If in both cases they have to pay these fees in order to carry on their practice, it seems to me that in both cases they should be allowed those fees as a deduction.
That change, as I say, was made by amending the Income War Tax Act in 1948. Someone may ask the question, "Were you not here then? Why did you not stand in the way of it at that time?" That is a very fair question. I have read before, and I read again today, the debate relating to that change. I find that it took place on June 2, 1948, and covers several pages of Hansard, commencing at page 4683. The budget resolution before us dealt with the deduction allowances to be made to railway employees in certain Categories, and travelling salesmen. I find that the main point being emphasized then was that a discrimination which had previously existed as between train conductors and engine crews on the one hand, and sleeping car conductors and porters on the other, was being wiped out by statute. For a period of time previously train conductors and engine crews were permitted to deduct their away-from-home expenses when they had to lie over at the other end of the journey, but that right was denied to the sleeping car conductors and porters, who might be on the same train. Well, we fought that out here a good many times, and when this amendment I am talking about was before the house in the form of a budget resolution on June 2, 1948, the minister emphasized that this discrimination had already been done away with by a ruling in the department, and that the effect of this amendment was to confirm that change.
Well, it was all to the good; we all accepted it. The whole tone of the minister's remarks and of the entire debate was that this change was in the nature of a concession. An
Income Tax Deductions allowance that had previously been given to only a few people was now extended to others, so the house accepted it as a concession to requests which had been made in this chamber and approved it readily. In fact the house approved the principle involved in that change so readily that when on June 23, 1948, we had before us the bill with the precise words of section 3 in it, it was not discussed at all. At page 5699 of Hansard for that date there is the notation, "Sections 1 to 5 inclusive agreed to." No one said a word. Everyone was satisfied that section 3, which was included in the group carried so readily, was something we all wanted. There was nothing in the discussion or in what the Minister of Finance said during that debate to indicate that in this resolution there was anything restrictive in character. After it got on the statute book, however-indeed, the next year, 1949- we began to discover that section 3 of chapter 53 of the statutes of 1948, which wrote a new section 6 into the basic Income War Tax Act, not only gave something but also took something away. It gave sleeping car conductors and porters the right to deduct away-from-home expenses; that was good; but it also had tucked into it wording which meant that all salaries and wages were henceforth to be regarded as net. The result of that wording is that it has now been ruled that trade union dues, teachers' fees, and doctors' and lawyers' fees in cases where the taxpayer is on salary, cannot be deducted.
I know quite well that what is said on the floor of parliament does not carry the weight that we sometimes think it should carry when courts deal with these matters. I again discovered that to be so a few days ago in reading the report of Mr. Justice Kellock with regard to the railway dispute of last fall. He makes it clear that although certain things were in the preamble to the bill, and although certain things were said on the floor of parliament, what he had to be governed by was the wording of the statute itself. I therefore realize that we cannot ask the courts to be governed by what was said on the floor of parliament when this section 3 of chapter 53 of the statutes of 1948 was discussed on June 2, 1948. But in all fairness I submit that this house should rectify what was done on that occasion. This house had no notion-I am satisfied that nobody in the house was aware of it, unless it was the Minister of Finance-that on that occasion a section was being written into the Income War Tax Act which was going to take something away. We knew it was going to give something, and we approved what it was giving. But we learned a year later that it was taking away a right which teachers had

Income Tax Deductions enjoyed and which some doctors and some lawyers had enjoyed. We also learned that it took away for the year 1948 a right which in 1949 Mr. Justice Angers said trade unionists should have had for the years 1945, 1946 and 1947.
I have just made the statement that it was the next year before we knew about this matter. Here on my desk I have a great many papers, too many to bother picking them all up; but amongst them is a copy of the Saskatchewan Teachers' Bulletin, put out early in the year 1949, in which the Saskatchewan teachers' federation reminded their members that the fees to their federation were deductible for income tax purposes. They still thought, in 1949, that the law was as it had been; and it was not until the fall of that year that they were notified that in their spring bulletin they had said something which was not correct. Others were in a similar situation. It was not until 1949, when people were filing their income tax returns, that news really got around as to the change that had been made by that section 3 of chapter 53 of the statutes of 1948.
I would point out that that chapter 53 of the statutes of 1948 was to all intents and purposes just a one-year statute. It amended the old Income War Tax Act, which had been on the statute book ever since world war I, making certain changes that applied for the year 1948. In the same session we passed chapter 52 of the statutes of 1948, which was the new Income Tax Aet which was1 to go into effect on January 1, 1949; and that is the income tax legislation under which we are now functioning. That chapter 52 carried forward for the year 1949 and subsequent years the same limiting provision that was enacted by section 3 of chapter 53. We now have the situation that apparently what the government wanted has been made law, despite the decision of the Exchequer Court of Canada to the effect that trade unionists had been denied, by ruling of the income tax department, something that was their right back in 1945, 1946 and 1947.
It seems clear to me that the way to wipe out this injustice of the past, this discriminatory story that we have had with respect to this matter, is for parliament to -ask the government to reconsider the whole position. That is what my motion does.
I repeat to all hon. members opposite, since it is a matter of concern to them, that my motion is not a want of confidence motion; it is a request that the government give consideration to this matter. What we request is simply that they consider the advisability of allowing as deductions for income tax purposes trade union dues and

fees to professional societies, such as teachers' societies and others, where those dues or fees are necessary to the earning of a livelihood. No one denies that in most if not all cases these dues are necessary to the earning of a livelihood. I am told by my lawyer friends that they cannot practice unless they pay their fees to the law society. I am told by my medical friends that they have to pay their fees to the medical society. I know that, in many if not all of the provinces, teachers certainly have to pay their fees to their teachers' professional societies in order to be able to teach. As to trade unionists, there are many closed shops and union shops in which a man cannot hold his job unless he carries his union card and is paid up and in good standing. There are other shops which are covered by the Rand formula and in which it is necessary not only for the members of the trade unions to pay their dues but for all others working in that plant to do so, even though they are not members of any union. In addition to the plants where trade union membership is a condition of employment, the fact of the matter is that the conditions of employment that are obtained by many workers are the direct result of the money they pay in trade union dues. I therefore submit that since the fees that are paid by these various groups of people are all necessary to the gaining of a livelihood, they should be allowed as deductions for income tax purposes.
I hope there will not be any objection to this motion on the ground that it would be difficult to determine which are bona fide dues and so on. That point is easy to deal with, I do not mind if the government insists that, in the case of trade unions, it apply only where a union has been certified, if you will, under a federal code or under a provincial code. Personally I should like to see it given to all unions, even to those that are seeking certification. But at any rate some provision could be worked out to satisfy the government as to the bona fides of any claims made under this provision; and I am sure that similarly there will be no difficulty in establishing the right of teachers, doctors, lawyers and any others who have to pay fees in this way in order to earn their livelihood.
I want to say frankly and categorically, Mr. Speaker, that legislation giving effect to this principle would be a slight encouragement to trade unions. The amount of money saved by the individual member of the trade union is only a few cents in some cases, and a few dollars in others. In the Cooper case, which went to the exchequer court, I think the saving involved was only about $35. Of course Mr. Cooper got back his expenses,

which were considerable. The principle is one which means a great deal to trade unionists and to people in similar situations. As I said, it would encourage trade unionists to a slight extent. I hope that will not be the reason why this resolution is turned down. I hope that hon. members will think seriously about it before they cast a vote against it. The last time it was before the house, 48 members voted for it. If it comes to a vote today-in other words if the government is not prepared to accept it and make it unanimous-I certainly hope that the number who vote for it will be increased considerably.
I have presented the story of this matter over these past few years, and I repeat the two points that I made earlier in my remarks.
I think this motion should be passed on two grounds.
On the one hand, I think it should be passed on the grounds of fair play as between various groups in our community. I think it should be passed as a matter of fair play, as a matter of rectifying the injustice, the discrimination trade unionists suffered at the hands of the income tax department's decision back in 1945, 1946 and 1947, during the years when, according to Mr. Justice Angers, the law gave them this right.
My other main argument is that since we all recognize that trade unionists play an important part in the life of our country, surely we should take steps of this kind, which are designed to help trade unionists feel that they are recognized as part of the industrial and economic life of this country. I am very glad to add the suggestion that teachers should be treated likewise. I am prepared to argue that so far as doctors and lawyers are concerned, and any others, they should ibe in the same category. The point is, let us be completely fair in our income tax legislation. On that basis I urge the adoption of this resolution,


Mr. J. A. Byrne (Kootenay East):: The hon. member for Winnipeg North Centre (Mr. Knowles) seems to get as much pleasure out of embarrassing the member for Kootenay East as the member for Kootenay East would get out of embarrassing the hon. member for Winnipeg North Centre as he would surely do if he enjoyed an equal amount of parliamentary experience.
The hon. member for Winnipeg North Centre has brought to the attention of the house the fact than on November 7, 1949, I spoke in favour of the resolution, and later on, when the vote was taken, voted against it. I think his explanation of the matter at that time should be sufficient to show why I voted against it. The explanation revealed
Income Tax Deductions that it was a vote of confidence in the government. I personally feel that, if every hon. member were to take his personal beef on the floor of the house when votes of confidence were taken in the government, responsible government could not exist. If they were to vote against the government on such things as union dues or other minor concerns, then responsible government could not survive in this land. In a few words that was my reason for voting against the resolution at that time.
I do not think it would be too untrue to say that on November 7 I was quite new to the house and did not have the experience that other parliamentarians have. The house had opened just a few weeks earlier that fall. At that time I did not know that the resolution which was introduced would result in a vote of confidence in the government. That was why I spoke and voted as I did. I might have chosen an easier and better way out, but I felt that since it was a vote of confidence I would like to face the issue and go to my constituents on that basis. I did that, and have had no criticism, I wish to inform the hon. member for Winnipeg North Centre, from any of my constituents when the truth of the matter was put before them.
The question of union dues being deducted from total income for income tax purposes has been discussed before. I feel that although trade unionism is not a profession in the sense that doctors and lawyers are members of a profession, or school teachers and nurses are members of a profession, yet trade unionists have a very important part to play in the economy of Canada.
When we have on the statute books legislation which provides* that certain groups may deduct their dues or fees, and at the same time prevents others from doing the same, it does leave a measure of what may be termed -and I think the only measure of-class legislation. It is on that basis that I should like to see this discriminatory legislation removed. Everyone should receive the same treatment.
The trade unionists who do not work in a closed shop or a union shop are probably in this position. In some cases they constitute 65 per cent or 75 per cent of the employees, but they are carrying the full cost of the administration of the union. They have to negotiate with management and they incur considerable expenses. There are officials who are on full time in the unions, and they have to be paid. In this way, 65 per cent to 75 per cent of the employable employees are paying the costs of the benefits which 100 per cent of the employees receive. If the dues were deductible for income tax

Income Tax Deductions purposes it would be a measure of recognition to those people who are carrying the burden, and it would be somewhat less costly to them. At the present time they have their union dues plus the cost of their income tax. The union dues must carry on. If these extra charges could be removed it would be a help.
As has been outlined by the hon. member for Winnipeg North Centre, this is not a want of confidence motion in the government, and I am prepared to support it.


Gordon Francis Higgins: I have very little to add to the words of the hon. member for Winnipeg North Centre on this matter. He has given a very clear exposition of the facts, with which I thoroughly agree.
On the last occasion that this matter was presented, namely on November 7, 1949, I voted in accordance with the views I am expressing this afternoon; but I must confess that after listening to the remarks of the hon. member for Kootenay East this afternoon I am still a little doubtful about him. So far as I am concerned this afternoon he has no reason to think that he and I are not on a par, whatever reason he may have for not having the parliamentary experience of the hon. member for Winnipeg North Centre. Therefore anything I say will not be taken by him as having any connection with parliamentary experience because both he and I came to this house at the same time.
On November 7, at page 1490 of Hansard, the hon. member said:
It Is not often, Mr. Speaker, that I agree with the principles expounded by the opposition. In this matter, however, I certainly feel that the Liberal party are making a distinction they should not make when they say that because a person is in the salary or wage bracket he is not entitled to deduct the fees which he pays to his organization. I cannot we any reason for such a distinction. I must say that I agree wholeheartedly with the amendment on this principle.
Following that statement, Mr. Speaker, the hon. member voted against the resolution. As I understood his explanation this afternoon, he said that if he voted against the government on such things as union dues or other minor things, then responsible government would not stand. That was the wording I took down from the hon. member's statement this afternoon, and I trust it is correct. I trust that is what he intended to convey. If that is his statement, then surely the only interpretation that can be put upon it is that, no matter how minor the question under discussion may be, no matter how much in conscience the hon. member may feel as to the correctness of what is being said, no matter whether he might feel privately that he should give his support, if the Liberal leaders crack the whip he will
vote against his conscience and against his beliefs. That is the only interpretation that can be placed upon it.


James Sinclair: The same way you vote.


Gordon Francis Higgins: I trust the hon. member will not suggest that I hold the same views he does, and that no matter how I feel or what I believe I will vote a certain way because I am told to do so. Surely the hon. member does not suggest that?


James Sinclair: The record proves it.


Robert Henry Winters: All out of step but our Joe.


Mr. Gray  don:@: Don't get so touchy, boys.


Gordon Francis Higgins: That may be the general idea of hon. members on the Liberal side of the house; it may be the rule of the Liberal party -I do not know about that. But it certainly is not the rule of the party of which I am a member.


Some hon. Members:: Oh, oh.


Gordon Graydon: Hear, hear.


Gordon Francis Higgins: There may be major matters we are asked to support; but certainly on minor matters, such as those the hon. member talks about-


An hon. Member:: What about controls?


Gordon Francis Higgins: -we vote as we believe we should vote.


James Sinclair: Who defines what is major and what is minor?


Mr. Brooks:: You wouldn't know.


Mr. Sinnoti:: How about national defence?


Gordon Francis Higgins: It is getting difficult to
answer all the questions, but it is a great compliment to know that there is all this interest paid to the few words I am expressing-and especially when one realizes that the Minister of National Health and Welfare (Mr. Martin) has been asking questions.


Mr. Marlin:: I like the hon. member; that is why.


Gordon Francis Higgins: I thank you; praise, indeed.
There is no reason why I should delay the house longer. There is one other matter however I should like to mention. I understand doctors and lawyers are allowed deductions for their professional membership fees. I understand further that doctors are allowed car allowances but that radiologists, who are doctors, are not allowed car allowances. I feel that radiologists who must necessarily travel between hospitals, and possibly to private homes, should be given similar consideration in this respect. This has been brought to my mind by the interjections of the minister, and I hope he will take the matter into consideration.
[Mr. Byme.l


Murdo William Martin: I will study the matter tor some time.


Stanley Howard Knowles: That is your long suit.


Gordon Francis Higgins: As the hon. member for Winnipeg North Centre (Mr. Knowles) is anxious to have a vote on the resolution this afternoon I shall close my remarks by saying that I supported a similar resolution before, and I shall most certainly support it today.


Mr. C. E. Johnston (Bow River):: Mr. Speaker, I do not think it is necessary for me to speak at length on this occasion. However, I was somewhat interested in the arguments offered by the last two speakers. One member, on the Liberal side of the house, pointed out the difficulties that may present themselves when it comes to a vote. The other was in the Progressive Conservative party, and he informed us that while in minor matters they may vote as they wish, on major issues there may be a little bit of pressure exerted. Let me say at once that in this party it does not matter whether an issue is major or minor, we vote as we see fit. And, as an hon. member suggests, we are always right.


Alfred Johnson Brooks: That makes it easy.


Stanley Howard Knowles: And sometimes at the
extreme right.


Charles Edward Johnston: It does seem to me that there is gross class legislation in connection with union dues. As has been pointed out, the doctors and lawyers have a closed shop, so that they cannot practise their professions unless they pay dues. In that respect they are exempt for income tax purposes.
Teachers in Alberta operate under a closed shop; they, too, must pay their dues or they cannot teach. Can anyone show me the difference between those groups? I have mentioned three professions, the first two of which, namely the doctors and lawyers, are exempt in most of the provinces.


James Sinclair: No, no.


Charles Edward Johnston: I said in most of the provinces.


James Sinclair: No.


Charles Edward Johnston: Unless they work for salaries -and not many of them do that now. The teachers in Alberta operate under similar circumstances, but we find that while the doctors and lawyers are allowed deductions for income tax purposes the teachers are not. I can see no justification for this when, in all cases, they are compelled to pay dues before they can earn a livelihood. It would require a good deal of argument by any member on the government side of the house to show the justice of that. There is simply no justice in it.
Income Tax Deductions
I do not think it was ever the intention that the House of Commons should pass class legislation. I am sure if hon. members were aware that this was being done they would object most strenuously. Why should not the same privilege be passed on to union workers, who must also pay their fees if they wish to belong to a union and work under its protection? Unionism in these days has become almost a profession; it is a highly organized function, and it seems to me it makes no difference whether one is in a labour union, as such, or in a medical union, a lawyers' union, a teachers' union, or what have you.
That is one of my chief objections to this type of legislation. I have discussed the matter on many former occasions, and I do not think it is necessary at this time to repeat what has been said. The matter has been outlined thoroughly by the hon. member for Winnipeg North Centre (Mr. Knowles), as indeed it was on the former occasion. It is sufficient to say that we intend to vote for the resolution.


Mr. R. R. Knight (Saskatoon):: Mr. Speaker, as I was named as seconder of the resolution, perhaps I should say a word at this time- although I believe the matter has been thoroughly covered. I speak against it for one reason only-I speak for the resolution-


Mr. Low:: Which is it, now?


Robert Ross (Roy) Knight: I speak for the resolution. I speak against the legislation on the statute books concerning the collection of taxes on professional fees. I hope I have made myself clear to my hon. friend.


Solon Earl Low: Perfectly clear.


Robert Ross (Roy) Knight: I am against the legislation because it represents gross discrimination; it is what someone has called class legislation. I do not like that expression when used in Canada because I do not think we admit the existence of classes, as they exist in certain other countries.
Let me endorse what has been said by the mover of the resolution. He mentioned school teachers and, of course, I am interested in that phase of the matter. As an active teacher in Saskatchewan my experience was that these fees were simply deducted from my salary cheque. A teacher in Saskatchewan has no option when it comes to the payment of professional fees: if he does not pay them, he does not teach; if he teaches, they are deducted from his pay, and there the matter rests.
I have a good deal of objection to the way in which the government changed the regulation. In 1945, 1946 and 1947 these fees



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Income Tax Deductions were exempt tor income tax purposes. The manner of the change was astonishing. The new regulation was defined as becoming applicable on January 1, 1948. The teachers in Saskatchewan as such were not notified about the change in the regulations. I suppose they were supposed to know what had happened. In fact the Teachers' Bulletin, for February, 1949, addressing itself to its members has this to say:
If your income tax return is filed late there is a penalty. You are reminded that federation fees are an allowable deduction.
It was only after some months that the teachers discovered, that is those who had filed their income tax returns, that they had to go into the whole matter again and that that right was being taken away. I appeal for the passage of this resolution on the grounds of equity and fair play. I have no objection whatever to the allowance of professional fees, either medical or legal. I think they should be exempt, but if they are exempt, I cannot understand why teachers' fees are not.
I want to go a step further. In moving this resolution I think my hon. friend had in mind particularly the exemption of trade union dues. I am in support of that. Speaking in this house on November 7, 1949, the last time this matter was brought up, the Minister of Finance (Mr. Abbott) said, as reported on page 1494 of Hansard of November 7, 1949:
We have considered the matter, and perhaps it should be adopted.
The "it" being the amendment moved by the hon. member for Winnipeg North Centre (Mr. Knowles). The minister went on to say:
Perhaps it is something to which we will come. It is certainly administratively practical.
I think the time has now come. There should be no discrimination and the government should act fairly in dealing with persons in all professions and trades who must belong to an association in order to earn their living.
James Sinclair: Mr. Speaker, the Minister of Finance (Mr. Abbott) is presently receiving some delegations on tax matters and I have been asked to say a few words. I did not come prepared because this matter has been dealt with each year by the Minister of Finance when similar resolutions or amendments have been introduced. In his speech the hon. member for Winnipeg North Centre (Mr. Knowles) touched fairly on the actual facts of the case with respect to the judgments which were given in connection

with the Income War Tax Act. However, he did not touch in any way on what is the main problem in this resolution.
The fundamental problem in all tax systems is as to where you draw the line between what is taxable and non-taxable. In the short experience which I have had in this house with tax measures and putting through budget resolutions each spring I have always found that point to be the most difficult. For example, in the excise tax law there is always the question as to whether goods are properly semi-luxuries or necessities. Each hon. member of this house can think of some goods for which a special plea can be made that they be placed in the lighter tax group.
So too in the matter of income tax. Let us be fair about this and admit that no one likes taxes. Taxes are especially unpopular with members of parliament because they are held responsible by their constituents for the imposition of those taxes. I have been doing quite a bit of reading recently on income tax. I find that today we seem to be much more tolerant toward taxes, especially income taxes, than they were when the tax was first evolved. Pitt was the first to introduce income tax in the modern British parliament in order to help finance the Napoleonic wars. So distasteful was the tax that at the time the period of the tax ended Lord Brougham ordered all records and documents to be burned so that no future government would have any income tax information which had been assembled at the time.
The responsibility on the minister, whether he be the Chancellor of the Exchequer in Great Britain or the Minister of Finance here, is to make any tax system as fair as possible, to make it understandable, to make whatever borderline he draws easily understood and easily enforceable. I think that is one of the most difficult problems in connection with taxation.
Coming now to the actual question under review, the matter of income tax exemptions, it has been a basic concept in both British and Canadian income tax laws to regard salaries and wages as net income, and so subject to income tax. On the other hand, those who are self-employed, those who have to spend money to make money, have always been regarded as having the right to make as deductions those expenses which are necessary to earn the income which they have earned. So we have the immediate difference established between those who are employed and those who are self-employed.
The person who is employed naturally tries to see that his salary or wage is set at a level which will cover all the factors he

must meet in earning his living and meeting the cost of living, including for example his professional fees. The man who is selfemployed must naturally try to make his business or his occupation or his profession so successful that he will be able to pay the expenses which are necessary to earn his income.
That leads us along to this one major difference, as far as the subject matter of this resolution is concerned, between those who are self-employed and those who are not. The doctor, lawyer, teacher or professional man, or the non-professional man or tradesman, who works for a salary or wages, has that salary or wages regarded by the income tax law of this country as being taxable income from which the statutory exemptions granted by parliament for dependents, married status, extra medical expenses and so forth may be deductible. But that is his taxable income.
On the other hand, the doctor, lawyer, teacher, or tradesman who is in business for himself is allowed to make as deductions from his gross earnings those outlays which are necessary to earn that income. That brings us to this matter of the closed shop. If a union man, say a plumber who is working for himself, should find it necessary that he belong to a union because of a closed shop agreement, his dues would be a deductible allowance. If a businessman or a doctor or a lawyer who is not being paid a fixed amount by a hospital or some other organization finds that he must belong to a professional organization in order to work- and these professional organizations are the closest thing to a union closed shop you can find except that the professions do not like the phrase applied to them-the fee he must pay is regarded as a proper business expense because he could not be in business unless he belonged to that organization.
For that reason there has been a distinction between those receiving salaries or wages and those who are self-employed. The hon. member for Winnipeg North Centre made much of the court interpretations of the provisions of the Income War Tax Act, 1945-46 and 1947, and that a judicial ruling had been given that these dues were deductible in the case of those who were not self-employed. He stated also that it was unfair that the Department of Finance took immediate action once those rulings were handed down to get back to what has been the intent in the income tax law in Canada since we have had an income tax, that is, to regard salaries and wages as net taxable income.
Income Tax Deductions
There are a lot of clever lawyers throughout the country-there are a lot of clever lawyers in this House of Commons-who are always busy at the law, and especially the income tax law of this country, trying to find loopholes. If the department did not take corrective action when such a loophole has been found then our whole tax structure would pretty soon dissipate. Clever lawyers can always find some point to take to the courts, and now and again they get nterpre-tations which were not the intent of the law as framed. I can give examples, and hon. members can remember examples. In the eleven years that I have been in the house corrections have been made, but I have never seen a tax measure made retroactive to cover such loopholes, but the hon. member may be able to correct me.


Stanley Howard Knowles: This particular law, chapter 53 of the statutes of 1948, which was passed in June of that year, was made retroactive to January 1, 1948.


Mr. Croll:: That is the practice in every budget.


James Sinclair: As pointed out by the hon. member for Spadina (Mr. Croll), it is the practice with every budget that the actual budget proposals should apply from the beginning of the fiscal year-as far as income taxes are concerned, but not so far as excise taxes are concerned, which generally have a midnight dateline on the budget day.


Stanley Howard Knowles: Not always with regard to income tax either.


James Sinclair: Coming to the point of fair play mentioned by the member, because the courts ruled that the phrasing of the law at that time permitted a deduction of dues, the hon. member suggests that it is only fair to continue that. If that were the case there are many corporation lawyers in Canada who would like to have that outlook sustained, men who have found ways to get around the provisions in the tax laws made by parliament. The proper course to follow is that which the department has always followed. When judicial rulings based on the act have been made which have not been what was meant at the time the act was passed, the department has taken corrective action.
The hon. member went on to point out that certainly in the case of closed shops, or where the Rand formula applied, union dues had to be paid and were a cost of the occupation of the men concerned. That is quite true; but once again, if we enter that field, where are we going to stop? Certainly the cost to the man of going to his work in the morning and of coming home at night is also a cost of his



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Income Tax Deductions occupation. There are professional courses he must take to improve himself and professional tools that he must buy. All these things to the man on salary or wages are a cost of working. We could start today with the proposal of the mover of the motion and step by step broaden our income tax law to include more and more of these very desirable exemptions which members are always so keen to put forward in order to secure exemptions for other groups. The hon. member for St. John's East (Mr. Higgins), for example, just a moment ago mentioned a special group, radiologists.
These things would lead to a constantly diminishing rate of net taxable income but would not in any way relieve the country from having to raise the revenues we must have for the management of the country. Therefore you might have a lower net taxable income but you are going to have higher rates thereon. These are the points that the Minister of Finance (Mr. Abbott) has made to the house in previous years, the fact that so far as a workable tax law is concerned the British and Canadians have always regarded salaries and wages as net taxable income. Men who accept positions on salaries or wages must always have in their minds the obligations they must meet out of those salaries and wages and try to secure adequate pay.
The second thing is that this line on taxable income is a very easy line understood by the people. It is a line very easily enforced so far as the department is concerned with a minimum of administration and evasion. These views have been put forward by the minister on earlier occasions. The government has, as the resolution asks, given consideration to allowing such fees or dues to be deducted from the wages or salaries of people paid in that way, and the Minister of Finance has told me to say that the government cannot accept the proposal for the reasons I have repeated.
Mr. Angus Maclnnis (Vancouver East):: Mr. Speaker, in view of the fact that the resolution was introduced by the hon. member for Winnipeg North Centre (Mr. Knowles), although I was not here when he spoke to it I assume he did not leave very much for anyone else to say that would be at all new. All I want to do is to give my support to the proposals in the resolution, and in doing so to reply to one statement made by the hon. member for Coast-Capilano (Mr. Sinclair), who has just taken his seat. He asked where the matter was going to end if exemption of union dues for income tax purposes was allowed. He wanted to know where we would draw the line. As a Liberal, surely he will

agree that the place to draw the line is where the same principles will apply to everybody.
To the extent that any tax does not apply to everybody in the same way then it is discriminatory, and in this case it is discriminatory against trade unionists and in favour of professional men and women. Today it is becoming more and more the general practice that the ordinary worker must be a member of a trade union if he is going to work at his particular trade, in the same way that a lawyer must be a member of the legal associations of his profession if he is going to practise law. As a matter of fact I think lawyers go a great deal further than trade unionists. My attention was drawn to the fact that recently a notable lawyer, whose home is in one province, had to go to the province of British Columbia to defend a case, and he had to pay the initiation fee of the law society of that province although he was already a member of the law society of his own province. The initiation fee, or whatever it is called in the profession, is quite sizeable. I think in this case it was $1,500, and I would imagine that he would be able to deduct that.


Mr. McCann:: That is a capital expenditure.


Angus MacInnis: If not then he would be able to deduct the fee he paid to the law society of his own province. All that the motion asks, and all that we have been asking in this house for the past few years, is that the same law apply to trade unionists as to members of the professions. I regret very much that the Minister of Finance (Mr. Abbott) has decided that he must continue to discriminate against trade unionists because, I assume, trade unionists are small fry with whom he need not be concerned.


Stanley Howard Knowles: Mr. Speaker-


Mr. Deputy Speaker:: I must inform the
house that if the hon. member from Winnipeg North Centre (Mr. Knowles) speaks now he will close the debate.


Mr. W. J. Major (Glengarry):: Mr. Speaker, I have been listening to the debate on the resolution for a long time. Something was said about class legislation. While we have been dealing entirely with labour we must also remember that the farmers of Canada have associations to which they pay dues, and that they are not entitled to deduct their dues or contributions for income tax purposes. Until such time as the entire question can be considered I do not think I would be willing to support the resolution. The amount involved is very small, possibly something under $3 per individual, so it would not make

very much difference to anyone as far as the cost of living is concerned.


Charles Edward Johnston: It is a matter of principle.
You do not advocate discrimination, do you?


Mr. G. D. Weaver (Churchill):: Mr. Speaker, I derived a great deal of pleasure from listening to the hon. member for Winnipeg North Centre (Mr. Knowles) this afternoon, and the other speakers who have taken part in this debate. I was hoping all the reasons that could be advanced both for and against this resolution would be brought forward so there would be no occasion for me to speak, but the reason I cannot support it has not been put forward, so I am going to take this opportunity to mention it. The hon. member for Winnipeg North Centre stated that the last time this subject was discussed the hon. member for Kootenay East (Mr. Byrne) had given reasons for supporting the resolution, but then voted against it. I believe his vote was communicated to his constituency just as mine was, and I have no doubt be explained it just as I did. I pointed out that it had been brought forward as a want of confidence motion in the government instead of being dealt with on its merits, which took care of that particular vote; but I went on to say that there were arguments both for and against the resolution, and my vote on that occasion did not indicate how I might vote if it was dealt with on its merits.
This afternoon there will be a vote, and I am sure the hon. member for Winnipeg North Centre would say that today the resolution is going to be dealt with on its merits-that is, unless all the Liberals happen to vote one way and all the opposition vote the other way. In that case perhaps he or someone else will suggest that this was done because some sinister individual behind the curtains somewhere said they should vote that way. That is not why I will be voting against this resolution, however. Mention has been made of class legislation and discrimination, suggesting that anyone voting against this resolution would be voting in favour of both class legislation and discrimination. I find that the community is divided into many groups. There is the industrial group represented by the unions; and rightly so, because the little man in industry, with no one to speak for him, is liable to suffer unless he organizes with others to take care of injustices like these. That is bound to be the case with the world as it is and human beings as they are. The same thing applies in agriculture; the farmer alone is liable to be pinched, so he gets together with other farmers in agricultural organizations. It is the same with businessmen; they get together in their groups.
Income Tax Deductions Because the world is such a complex place, eventually more and more groups will be organized, not against other groups but to see that their members have a fair hearing and are dealt with justly. Our job here is to see that as between groups everyone gets a fair hearing and is fairly dealt with.
Among my constituents there are a great many trade union members, and a great many farmers, who are also organized. However, there are also many fishermen, who are not organized, many trappers, who are not organized, and other unorganized groups. To vote for this resolution at this time, I think, would be taking a step that would make it more difficult for the Minister of Finance to collect the money necessary to make the tremendous expenditures that will have to be made, and to support this resolution would not be dealing fairly with all those others who are not able to have someone speak for them in this house. The unions have members to speak forcibly for them, and the farm organizations have members to speak for them. As the hon. member for Souris (Mr. Ross) was going out I jokingly said to him, "I thought you would stay here and speak for the farmers, and perhaps suggest that the final payment under the five-year wheat agreement might be exempt from income tax." He replied that he was not going to make that suggestion, but if anyone else did he would be glad to support it.
The hon. member said a line had been drawn dividing the doctors and lawyers. He did not mention anything about engineers. I pay dues to an engineering society, and I have never dreamed of claiming those as a deduction. Businessmen pay dues to chambers of commerce and other organizations, and so on. Then I think of all those who could not come under such legislation; and because the doctors and lawyers have that privilege it seems to me the resolution is saying that since we cannot get the doctors and lawyers off that basis we should take the mountain to Mahomet and see that as many others as possible get on the same basis. If some time in the future, in order to do away with a discrimination which the hon. member believes exists, he would bring in a resolution that would tend to simplify the income tax return, eliminate the small proportion of doctors and lawyers who now deduct their fees, and at the same time enable the people in whom he is interested to regain their position, that might be worthy of consideration. However, I am afraid I cannot support any proposal which would make our income tax forms much more complicated at this time in our history.


Stanley Howard Knowles: Mr. Speaker -

Income Tax Deductions


Mr. Deputy Speaker:: Order. I must inform the house that if the hon. member for Winnipeg North Centre speaks now he will close the debate.


Stanley Howard Knowles: I wish to avail myself of the opportunity to close the debate, because I believe the remarks of the hon. member for Glengarry (Mr. Major), the hon. member for Churchill (Mr. Weaver) and the parliamentary assistant to the Minister of Finance (Mr. Sinclair) do deserve consideration. I want to thank the parliamentary assistant for his reference to the fair and accurate manner in which I presented the facts relating to this whole question. I appreciate, too, that he made his arguments quite clear, because it seems to me the two main arguments he presented are very easy to meet, and I shall endeavour to meet them. However, I will save the parliamentary assistant until later and deal with the other two hon. members first. After all, parliamentary assistants should have some standing around this place, in view of all the cracks that are made about them.
May I say to the hon. member for Glengarry, as well as to the hon. member for Churchill with respect to part of what he said, that the resolution is worded to include farmers, engineers and others, the very groups for whom they speak. I ask hon. members to note that I did not stop at trade union dues, but went on to say "professional dues to teachers' organizations, and similar fees necessary to the earning of a livelihood." Those words are quoted directly from the resolution. I point out that I and others have had a good deal to say about doctors and lawyers, but doctors and lawyers are not mentioned in the resolution. I mentioned trade union dues particularly, because I feel trade unionists got a particularly raw deal in that they were denied the right to deduct those dues for income tax purposes during the years the law allowed it. I mentioned teachers particularly because I felt that they got a raw deal in that, having had the privilege of making those deductions, that privilege was taken away from them in the manner which was described both by the hon. member for Saskatoon (Mr. Knight) and myself.


Mr. Rooney:: What about accountants?


Stanley Howard Knowles: The hon. member for St.
Paul's (Mr. Rooney) asks:	what about
accountants? All these other people are included in that general phrase "and similar fees necessary to the earning of a livelihood." As a matter of fact, a good many of those people-farmers, engineers in some cases, and accountants in some cases also-are in
[Mr Knowles.]
the category of persons whose income is on a gross basis. Those who are on a gross basis, as is the case with doctors and lawyers at the present time, have the right now to deduct expenses necessary to the earning of their gross income. To farmers, to engineers and to accountants who are on a gross basis I suggest that they do not need legislation but that the act now permits, in the case of those whose income is gross, deduction of the amounts they expend in the earning of that income. I am right with them.
There is, Mr. Speaker, an attempt to misinterpret or misunderstand this motion, if there is any suggestion that its purpose is to bring in class legislation. The purpose, Mr. Speaker, is the very opposite. The very wording of the resolution makes clear that its purpose is to end class legislation and to extend to all persons the right to deduct for income tax purposes the amounts necessarily expended in the earning of a livelihood, where those amounts are in the nature of fees to unions or societies or associations of one kind or another. I hope that is perfectly clear. I remember that once before, when this matter was up for discussion, the Ottawa Journal made the same comment. I am surprised to hear the hon. member for Churchill (Mr. Weaver) and the hon. member for Glengarry (Mr. Major) express the views that were expressed on the editorial page of the Ottawa Journal. They thought that what was wrong with this suggestion was that it was class legislation. Not at all, Mr. Speaker. It is class legislation the way it now is. My request to the government-


George Dyer Weaver: May I ask the hon. member
a question?


Stanley Howard Knowles: Certainly.


George Dyer Weaver: I was referring to the fact
that it had been mentioned by members of the party of which the hon. member for Winnipeg North Centre (Mr. Knowles) is a member.


Stanley Howard Knowles: I do not understand that it is a question the hon. member for Churchill has asked. I can only draw his attention to the wording of the resolution. As a matter of fact, I point out to him that I broadened the wording of the resolution today as compared with the wording of the amendment to the motion to go into supply that I moved on October 31, 1949, precisely in order to make it clear that I wanted this to be a principle to extend to all without fear or favour. I would have thought that some of those who spoke on this motion would have compared my motion of today with my amendment to the supply motion of a year and a half ago, in order to note the difference. The difference between the wording of the two meets the very point that

the hon. member for Churchill and the hon. member for Glengarry have raised. There is no argument on the point. I am with them one hundred per cent that this right I am asking for people to whom it has been denied should be extended to all who have to pay out any kind of fee necessarily for the purpose of earning a livelihood.
Before I leave the hon. member for Churchill, I must say that he disappointed me a little bit this afternoon. He started out by saying that part of the reason for his vote on November 7, 1949, when he voted against my amendment on that occasion, had been stated by me and by the hon. member for Kootenay East (Mr. Byrne) when we referred to the position that government members find themselves in when there is before the house an amendment that is in effect a vote of want of confidence. But he said that was not the whole reason and that he was going to give the rest of the reason so far as he was concerned. I thought we were going to get the whole story, as it was reported in the Winnipeg papers shortly after that November vote, at which time we were told what he had said to the trades and labour council of Flin Flon, Manitoba, when they asked him why he had voted against this motion. I have not in front of me a copy of that dispatch which appeared in the Free Press but the hon. member for Calgary West (Mr. Smith) referred to it on another occasion.


George Dyer Weaver: May I ask the hon. member a question?


Stanley Howard Knowles: Certainly.


George Dyer Weaver: Do you believe everything you read in the newspapers?


Stanley Howard Knowles: If the hon. member wants to deny what was in the Winnipeg Free Press on that occasion, and which has already been reported to this house by the hon. member for Calgary West, he is free to do so. The Free Press reported at that time that the hon. member for Churchill said to the members of the Flin Flon trades and labour council that, since coming down here to Ottawa, he had found that there were so many things one had to get for his constituency it was a good idea to stay on the good side of the government. That was the reason reported in the Free Press to have been stated by the hon. member for Churchill as the reason why he had voted against this amendment.


An hon. Member:: That is a good one.


Some hon. Members:: Hear, hear.


Stanley Howard Knowles: If the hon. member for Churchill wants to deny that he said that to 80709-44
Income Tax Deductions the Flin Flon trades and labour council, and if he wants to tell the government now that it is not his aim to vote the way they want in order to keep on their good side, I will sit down and let him do it.


An hon. Member:: No move.


Stanley Howard Knowles: The hon. member for
Churchill remains in his seat.


Mr. Mutch:: That is a practice that should be emulated.


Stanley Howard Knowles: To get back to the hon. member for Coast-Capilano (Mr. Sinclair), the parliamentary assistant to the Minister of Finance-


Mr. Laing:: Will the hon. member permit a question before he goes on further? I think the weakness of his argument in the minds of many members arises out of the generalization, when he refers to "and similar fees necessary to the earning of a livelihood." If the language cannot be made more specific than that, I would ask him how the department can hope to specify with regard to tax collections, because it opens up the whole area of claims.


Stanley Howard Knowles: I am quite prepared to answer that question. Before I do so, let this be stated clearly. If I had done what the hon. member for Vancouver South (Mr. Laing) asks, and had spelled out four, five or six specific cases where it was to be allowed, and had gone no further, my resolution would have been condemned for being specific and for not leaving the door open to the department to decide what others should be included. As hon. members know quite well, that is something that has happened time and time again. The fact of the matter is that to anyone who wants to take the trouble to read the clear English- and I hope it is equally clear in the French translation-it will be evident that what we are asking for is deduction of trade union dues, professional dues to teachers' organizations, and similar fees necessary to the earning of a livelihood.


Arthur Laing: That is multitudinous.


Stanley Howard Knowles: Surely, in a similar position are fees or dues paid to an organization which is related occupationally to the job you are doing. Surely that is clear. Surely it is better to lay the matter before the government in this way and let them determine the exact details of such a proposal than to make the other mistake that the hon. member for Vancouver South would have liked to trap me into making.


Arthur Laing: Not at all.


Stanley Howard Knowles: I am glad that the hon.
member was not trying to set a trap for

Income Tax Deductions me. But I think he realizes that that is the sort of thing that happens in this house all the time. It is not in order to refer to other motions that have been discussed in this session, but I can think of other debates in which members on the government side have said that if my colleague had only worded the motion in such a way, it would have been better. But if my colleague had done so, the request from the government side would have been to word it the other way.
I am still anxious to get around to my friend the hon. member for Coast-Capilano, and he is sitting over there on tenterhooks too. The hon. member for Coast-Capilano discussed the question discursively in part but in the main he got down to two general arguments. One of his arguments was that the government was perfectly right and that it was to be defended for its action in 1948 in changing the law to carry out what had been its intention in the years 1945, 1946 and 1947. There is no question as to what the intention of the government was in those previous years, because the ruling of the Department of National Revenue carried out that intention.
The hon. member says that the government is to be commended for changing the law so as to carry out what had been its intention. Well, Mr. Speaker, this is like the discussion the hon. member for Vancouver South and I have been having. The question of intention comes up time and again. I must refer to the most recent example, the one that is in my mind at the moment, namely, the Kellock report in reference to the railway dispute of last fall. It was said on the floor of this house that it was the intention of the government that the workers involved in that dispute should not be asked to accept legislation that was discriminatory as between one group and another. That same intention was expressed in the preamble to Bill No. 1, which was before parliament last fall. We were asked on the floor of parliament to accept the government's word that that meant that the hotel and water transport workers would get the same deal as the railway employees got. And I can say that the union leaders, too, thought that that was the case; but when Mr. Justice Kellock made his report he said in it-I was quoting from it in another connection the other night, and I could give the quotation, but I know it very well, in spirit at any rate. He said that the employees drew two things to his attention: one, the wording of the preamble, and two, statements of intention made on the floor of parliament. But he made it clear

that he had to be governed not by the preamble, not by the intention of the government or the intention of parliament but by what was in the statute.


James Sinclair: I think the hon. member wants to be fair. There is quite a difference in the two cases he uses, because the Department of Finance and the Department of National Revenue had shown by their interpretation and ruling in this case that it was their intention not to allow this deduction. However, when they were challenged in the courts on the actual interpretation of the law, they changed it.


Stanley Howard Knowles: All right; Mr. Speaker, the hon. member for Coast-Capilano is just emphasizing the fact that when the government found in the case of the income tax situation that its intention was not clearly spelled out by the law, they changed the law.


James Joseph McCann: Why should they not?


Stanley Howard Knowles: The Minister of National Revenue says: "Why should they not?" All right, but what was the intention of the preamble to Bill No. 1 last fall?


James Joseph McCann: We are not talking about that.


Stanley Howard Knowles: Just a minute; I have the floor. The intention expressed on the floor of parliament by the Prime Minister (Mr. St. Laurent) was not carried out in the legislation enacted by Bill No. 1. I call upon the government to do the same thing, to bring in legislation to carry out their intention with respect to the hotel and water transport workers, even as they so readily brought in legislation to carry out their intention to deny to trade unionists the right to deduct their trade union dues for income tax purposes. Hon. members often complain when we speak about class legislation, but look at what we get all the time. We get a ruling by a department which is wrong; the law is changed to meet that ruling and we are asked to commend the government for changing the law to carry out their intention; but when it comes to this other intention clearly stated the Prime Minister tells me on the floor of the house that it is not the intention of the government to make any change in the law which Mr. Justice Kellock says does not accord with either the spirit of the preamble or the intention expressed on the floor of parliament.
So much for the argument about intention on the part of the government that the parliamentary assistant to the Minister of Finance has tried to give us. His other argument, which is the basic or fundamental argument in the field of taxation which the Minister of

Finance (Mr. Abbott) has given before, is that you have to draw a line somewhere. Well, that is a great phrase. I can remember back in my university days when we used to debate all kinds of academic questions, and once upon a time at the university where I was we had a debate on the question: "Resolved that a line must be drawn."


An hon. Member:: What is a hen?


Stanley Howard Knowles: It is something like the reference made the other night by the hon. member for St. John's East (Mr. Higgins). The hon. member for Coast-Capilano (Mr. Sinclair) says that a line has to be drawn. Then he says that the place to draw that line is with respect to net income. That is, to draw it as between net income and gross income. The decision of the government has been that in the case of net income there are to be no deductions, no deductions except those provided for in the act. What a way to draw a line! You draw a firm line, and no deductions are to be allowed; but in the very act in which you draw that line you proceed to make certain exceptions. Well, all we are asking is that there be included in those exceptions to that line which has been drawn exceptions which are necessary to achieve fair play.
There are certain cases where, despite the line that has been drawn which says that net income must be fully taxable, exceptions are allowed. For example, a single clergyman maintaining a dwelling is allowed certain deductions from his net income as a clergyman. Clergymen operating cars, even though on a net income, are allowed certain deductions. Transport workers on salary in certain cases, those men who have to lie overnight away from home, are allowed deductions from net wages for those away-from-home expenses. The same is true of travelling salesmen under certain conditions that are spelled out in the act and regulations. These are all cases of men on net salaries. They are allowed those deductions.
Family allowances are an addition to our income, on which there is no taxation. I hope I do not draw the abuse of other hon. members if I refer to the fact that part of our income, and the income of members in certain legislatures in this country, is not taxable because we have to spend that part, all of it, and more in some cases, in connection with the earning of the rest of our income. Therefore, Mr. Speaker, it is illusory to say that the government's decision is based on this unctuous principle that we have drawn a line. The line has been crossed so many times that
80709-44*
Income Tax Deductions it is shattered and there is nothing unreasonable about the request that one of the exceptions to that line be this business of trade union dues, teachers' professional dues to their societies and the fees of any others, farmers, engineers, accountants, and all the rest who have to pay these fees in order to carry on their particular occupation.
I remind the government that we used to get the same argument about drawing a line from Mr. Ilsley when he was minister of finance in relation to one particular group of people. I refer to sleeping car conductors and sleeping car porters. I referred to them earlier today, but the position taken by the hon. member for Coast-Capilano makes me refer to them again. I used to complain year in and year out, as I still complain year in and year out about some other things, about the fact that train conductors, engine crews and so on, when they were away from home were allowed to deduct from their wages their away-from-home expenses before computing their income tax, but that sleeping car conductors and sleeping car porters, riding on the same train, in some instances lying overnight in the same place, were not allowed to make these deductions.
The former minister of finance (Mr. Ilsley) used to express great sympathy with my protest against this discrimination made on the floor. Both of us wanted the train conductors and engine crews to have that deduction, but I wanted the others to have it too. "But", said Mr. Ilsley, "you have to draw a line." That is exactly the same line my hon. friend is giving us today. The line then was a little different. The line at that time was between a monthly salary and an hourly wage.
How ridiculous!-that because sleeping car conductors and sleeping car porters were on monthly salaries, and train conductors and engineers were on hourly wages, one was allowed to deduct his away-from-home expenses and the other was not. But, year after year, for a great many years, Mr. Ilsley stood up and said, "I appreciate the point made by the hon. member for Winnipeg North Centre (Mr. Knowles), but you have to draw a line somewhere".
Well, the day came when, because of representations on that point, the government realized that that line had to be abolished. The irony of the story is that it was the very section which abolished that line of discrimination against sleeping car conductors and sleeping car porters which created this new line of discrimination against trade unionists. It was that very section, section 3 of chapter 53 of the statutes of 1948, which wiped out the old line but,

Income Tax Deductions without our knowing it, drew this new line that the Minister of Finance talked about on November 7, 1949, and the hon. member for Coast-Capilano talks about today.
I submit we should not be bound by these technicalities, by these precepts that are announced, that you have to draw a line. What we should be concerned about is fairness and justice all round. And I am sure that members generally, including the hon. member for Glengarry (Mr. Major), the hon. member for St. Paul's (Mr. Rooney), the hon. member for Churchill (Mr. Weaver) and the hon. member for Coast-Capilano (Mr. Sinclair), realize that what we are asking for today is only fair; and I hope the house will vote for this resolution.


James Sinclair: Mr. Speaker, I think there are some of the hon. member's closing remarks which should be withdrawn.
Black (Cumbertand)
Blackmore
Blair
Bourget
Brooks
Browne (St. John's West)
Bryce
Byrne
Casselman
Catherwood
Charlton
Coldwell
Corry
Croll
Diefenbaker
Drew
Fair
Fulton
Gagnon
Gibson
Graydon
Green
Harkness
Helme
Herridge
Higgins
Johnston
Jones
Knight
Knowles
LaCroix
Lennard
Low
Maclnnis
McLure
Maybank
Murphy
Noseworthy
Pearkes
Poulin
Quelch
Shaw
Stanfield
Stewart (Winnipeg North)
Thatcher
Thomas
Tustin
White (Hastings-Peterborough)
Wright Wylie-56.


Some hon. Members:: Question.


James Sinclair: My views were given as clearly and as fairly as I could give them. For the hon, member to impute that if I were fair I would vote for the resolution is not in keeping with the rest of his remarks.


Stanley Howard Knowles: I did not say anything about the hon. member's fairness. I said that I thought in their own minds the members I named agreed with the spirit of the resolution.


James Sinclair: Speaking to a point of order, the hon. member is trying to impute that if I were fair in my own heart I would not have taken the stand I did take. But I have taken the stand and I have spoken with as much fairness as he has. He should1 withdraw the imputation. He may go on thinking it, but he should not go on saying it in the house.


Stanley Howard Knowles: If I said anything about fairness on the hon. member's part I shall withdraw it; but I do not think I did.


Some hon. Members:: Withdraw.


Stanley Howard Knowles: Just a moment, now.


Mr. Warren:: Don't say "if".


Stanley Howard Knowles: You cannot ask a member to withdraw something he may not have said. I said that if I did say anything as to the fairness of the hon. member for Coast-Capilano, or other hon. members, I would withdraw it.



FEDERAL UNION


Mr. Alistair Stewart (Winnipeg North) moved:: That, in the opinion of this house, the government should take into consideration the advisability of supporting the calling of a convention of delegates from the democracies which sponsored the North Atlantic treaty and representing the principal political parties of such democracies, for the purpose of exploring how far their peoples, and the peoples of such other democracies as the convention may invite to send delegates, can apply among them, within the framework of the United Nations, the principles of federal union.
He said': Mr. Speaker,
The people of the earth having agreed
that the advancement of man in spiritual excellence and physical welfare
is the common goal of mankind; that universal peace is the prerequisite
for the pursuit of that goal;
that justice in turn is the prerequisite of peace, and peace and justice stand or fall together;
that iniquity and war inseparably spring
from the competitive anarchy of the national states; that therefore the age of nations must end,
and the era of humanity begin;
the governments of the nations have decided
to order their separate sovereignties
in one government of justice, to which they surrender their arms;
and to establish, as they do establish, this constitution
as the covenant and fundamental law
of the Federal Republic of the World.
There is the end, the goal, the ideal which I am certain is in the minds and hearts of all. The words which I have quoted are taken from the preamble of a draft constitution for world government. This draft constitution was prepared by a committee of eleven very distinguished men who met for a period of at least two years. Its chairman was Mr. Robert M. Hutchins, then president of Chicago university, and one of its members was Professor Harold Innis of the university of Toronto. The purpose of such a federation, such a world government, can be stated quite clearly. It is to give man greater freedom and equality by making man subject to the rule of law. Its hope is to abolish
the scourge of war. Its hope is to give the children of the world that security which our parents have denied us.
It envisages world union, which is something devoutly to be wished for but which today, owing' to the nature of things, is obviously utterly impossible. The words which I use in the resolution, while they express hope for a modified form of union, should not be new to members of the house for they are substantially the same as those which were accepted by the Canadian Senate last year. They are substantially the same as those words which today are before the houses of congress in the United States.
What I am asking is that approval be given to the suggestion that the sponsor nations of the North Atlantic treaty organization ask representatives from each of the major political parties to meet to discuss the possibility of forming some type of union such as I envisage. It is not restrictive, for its members would have the right to ask others, but with this aspect of restriction I shall deal later and more fully. Nothing which I have to say will be original; nothing will be new. All these things have been said before but the fact that they have been said before does not in any way invalidate them. It will be asked: What do I expect of such a union? The first and most obvious thing is that there should be a common citizenship with a bill of rights protecting the individual, for the individual is the very heart and core of any system of union such as I have in mind.
Not only would it do that but it would also protect the rights of minorities in the nations which are members of the union. To take our own country, for instance, I am convinced there would be no infringement whatsoever upon the rights of any individual or any minority. Rather I think through union would those inalienable rights be strengthened.	,
I would expect to see a common foreign policy. It may be argued that we have a common foreign policy now. We democratic nations of the North Atlantic are determined that we shall not be aggressors at any time. We are determined that peace shall ensue through the maintenance of law and order. It is true we have a common policy to that effect. Yet there are differences between us, differences which are perhaps not so great as many of us fear but differences which in a world of sovereign states must be dangerous, and under a union I think many of those differences would not be so apparent. We would need to have a common defence policy.

Federal Union
Today as sovereign nations we are arming against the threat of aggression. Sovereign nations in. the past, the nations of the north Atlantic and others, have indulged in an arms race when they thought it necessary for their own defence. They have entered into alliances and treaties. They have sought bases for their greater individual security. Yet history shows that treaties, leagues and covenants never kept sovereign states together. History also shows that the ally of yesteryear may well be the enemy of next year.
In a world of sovereign states there are three ways of solving problems, by the overwhelming bludgeoning of force, by negotiation or by war, but in a world of sovereign states when all else has failed the only way in which a nation can insist on its rights is by that extraordinarily stupid way of going to war. Again it may be argued that we already have a common defence under way but it is something which is only in the embryonic stage. Should the commander in chief of the allied forces, General Eisenhower, wish to expend any large sum of money for the common defence of all, he has to go before the council of twelve. Each of these individuals must go back to his national government and there get approval or disapproval for the projected expenditure. Today, when war may strike with the speed of lightning, such a procedure is slow and cumbersome and may conceivably lull us into a false sense of security. Under union the commander in chief would have power to decide, subject to the parliament of the union, what was needed; and that parliament then would vote him the money. This would imply that the union must have the power to impose taxation and collect taxes. I suspect that were our defences pooled in the union we should find taxes for defence not quite so onerous as they are upon us now as citizens of an individual state.
I would envisage also a free movement of peoples and goods. As a result of the greatly enlarged area of free trade, obviously there would be a rapid improvement in the standard of living of all. I am convinced that there are Canadian manufacturers and workers who believe that if tariffs were to be removed immediately the effect upon Canada might well be devastating. On the other hand, however, there is an argument which might appeal to them. By abolishing these tariffs we would open a new market of some three hundred million people. In the past we have learned to our cost that insistence upon our own sovereignty has led only too often to economic autarchy and a decline in the standard of living which of necessity must follow.

There is another factor which I think has to be borne in mind today. Industry in the western world is extraordinarily efficient and tremendously productive, so much so that the individual state has become too small a unit in which it may operate. So it would be the better part of wisdom to adapt our institutions to the new society which is being formed before our very eyes. If we are to have the free movement of goods and peoples it follows, surely, that we must have a common currency; and I am certain that the Minister of Trade and Commerce (Mr. Howe) and the Minister of Agriculture (Mr. Gardiner) would be the first to agree that national currencies have been one of the greatest deterrents to trade this world has ever known.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at eight o'clock.
Alistair McLeod Stewart: Mr. Speaker, before the dinner recess I was outlining to the house my idea as to the form which union should take. There is nothing sacred about these views of mine. Many who agree, as I do, on the necessity for union, would possibly disagree with me quite strongly on some details. Nevertheless I offer my suggestions as a basis for discussion. Now what would we hope to achieve out of union? The first and most obvious objectives would be the establishment of a great commonwealth of free peoples dedicated to the spiritual and physical freedom of mankind; and the achievement of a union which might be strong enough to deter an aggressor from any military action against us. What weighs largely in my mind is this fact. If a war were to come, if we are to fight it efficiently and effectively, we should find ourselves in a union such as I have suggested, whether we liked it or not. But while I welcome the idea of union, I should prefer to see it created when we have time to think about what we are doing and the problems we are facing rather than have it done under the duress of war.
In June of 1940, when things were black indeed for our cause, Mr. Churchill offered to the people of France common citizenship with the people of the United Kingdom. He offered them this as a means of salvation in a time of extremity. Unhappily, the time was too late. Today we are not in a moment of extremity, it is true. We have time to think of what we are doing and I still believe that our salvation lies in the direction of union.

From the more material point of view we can argue that union, of the western democracies with certain other nations would mean that we have amongst ourselves some 75 per cent of the industrial capacity of the world. It is true that, in the final analysis, it is the infantry, the men in our defence forces, who win wars. But no matter how great their heroism or how outstanding their courage, if they cannot get the arms with which to fight it is of no avail. Wars today are won in factories and really nowhere else. What we have to remember is that it is the first battle we have to win this time. In the past we have prided ourselves on always having won the last battle. But on this occasion, if war comes, the first battle will be that for Europe; and if we lose Europe, then the outlook for us on the North American continent will be bleak and grim indeed.
I said earlier that the union which I envisaged should not be exclusive. We should work with partners, with people whose human values are the same as ours, whose regard for human personality is the same as ours and who have the same desire for freedom. Indeed, the strongest of all possible bases for union would be a common allegiance to the democratic forms of government to which we adhere.
Again the question may be asked: Would this rule out Asia? At first I should be inclined to say no. But on second thought I would qualify the answer. We are convinced here, as are many people in Asia, that communism cannot help that continent. Yet our answers have not contained really adequate and convincing solutions. It is true we fight for freedom. But then, we know what freedom is. Tens of millions of people in Asia do not know what freedom is. Instead they have lives in which they have to endure unending hunger, lives of hopeless poverty, lives which too often are short and brutal; and what is worst of all, they have to suffer from the wretched indignity of being looked upon as being inferior people because their skins are coloured.
We ought to remember that Asia today is not in revolt against the Soviet union. Asia is in revolt against the western world and against the imperialism which it associates with it. I think that much of that imperialism is disappearing. Nevertheless, it is that which Asians fear. I should therefore like to see in this commonwealth of free people the citizens of India, Pakistan and Ceylon. I should like to see them in it for this reason, if for none other; and to my mind it is predominant. As a member of the Christian community I believe that the citizens of these countries are as we are, the children of God. That
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being so, I affirm with them a common brotherhood. But union, as I see it, would be restricted for it would be manifestly absurd to enter into a union of this description with a totalitarian power. The very essence of union is its ability to appeal to the individual citizen. It would be the individual citizen who would appoint and elect his representatives to the union government; and since in a dictatorship we cannot reach the individual citizens, we need not be surprised if they would not apply for membership.
It is interesting to note that the desire for union springs not from the totalitarian countries but from the free citizens of the free nations. This is not a target for tomorrow. After all, tomorrow never comes. It is a target for today, for now. There are those who will say that my ideas are visionary. That may well be so. Yet surely the problems confronting the world today are not of necessity political nor are they of necessity economic problems; they are essentially moral problems, and we have not yet even started to find the answers. The realist, the one who prides himself on being hardheaded, may say that this is visionary; but there have been those of that ilk in other generations in the last two thousand years who have always believed that what Jesus Christ taught was excellent-but visionary. Nevertheless, if we had carried out a little more of what He taught, there would be no need for such a resolution before this parliament. There are those who say that the dangers of union are great. Of course the dangers of union are great, but the hopes which will arise from it are surely infinitely greater. There are difficulties ahead of us; there are incredible difficulties. But what impresses me most is that if a war does come these difficulties will be swept away, and I still argue it is better that we should unite now rather than under the stress and strain of war. As Mr. Churchill said at Copenhagen last year:
Unless a world government can be set up and brought quickly into action the prospects for peace and human progress are dark and doubtful.
Mr. Bevin said a little while ago that he was willing to sit with anybody, of any party, of any nation, to try to devise a constitution for a world assembly. And yet they know these difficulties. What are they? Some of them exist solely in the minds of people; and one of the greatest we have to combat is that of the concept of national sovereignty. Six years ago in the house in my first appearance in a debate on external affairs I used words that I believe to be true today. I said that national sovereignty is a fetish; it is a myth; it does not exist.

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There cannot be one member of parliament who willingly voted or will vote for $5 billion for arms who would not rather spend that money on improving the conditions of people in this country and in other nations, and yet despite our sovereignty we are compelled to do so for our own protection. We have no alternative.
In other days our national sovereignty did not protect us against changes in tariff rates and currency devaluations, for we had to do precisely the same things as others to safeguard ourselves, although in the end we hurt ourselves. National sovereignty did not save us in 1939 when freedom was endangered. Today all over the world the lights of freedom are flickering and going out. Every time that freedom disappears in one part of the world it is going to affect us. We have realized that. As Archibald MacLeish, the then librarian of congress, said:
There has been destroyed in the minds of men and women in this country the superstition that what is done beyond three thousand miles of water is not really done at all; the ignorant superstition that violence and lies and murder on another continent are not violence and lies and murder here; the cowardly and brutal superstition that the enslavement of man in a country where the sun rises at midnight by our clock is not enslavement by the time we live by; the black and stifling superstition that what we cannot see and hear and touch can have no meaning for us.
We have our sovereignty. Nations of the world have insisted on sovereignty, and the result has been insecurity and anarchy. I want to substitute law and order for this anarchy, and let there be no illusions as to what I mean; for in this context I say that law is the justified use of force. Law exists only where there is force. Law exists only where there is coercive power. There must be force, and yet so many of us shrink from this idea. We regard it as something wrong, as something immoral, and yet force is a reality which can be used not only for great ends but for mean and ignoble ends. We are determined to use force to preserve those things which we cherish.
Then, what about this talk of peace? Peace as such is not important. Peace is an end result. We had peace in the 1930's; we had peace when Manchuria was invaded; we had peace when Ethiopia was ravaged; we had peace when Austria disappeared; we had peace when Czechoslovakia was submerged. We had peace when millions of human beings were being destroyed because of their faith and their religion. What sort of peace was it? The peace we knew was something unjust, uneasy and suspicious, which could only end in war. So it is advisable for us to institute law and order, and out of that peace must come. We have to face up to the

paradox of this century, namely, that to preserve peace we have to be ready to use force.
We have learned the folly of sovereignty surely in our own individual lives. Each of us has given up his personal sovereignty to the community in which he resides, and as a result of that denial we find ourselves freer than ever. We have security; we have equality of rights where otherwise there would be chaos.
We have surrendered our sovereignty to the community so that it can administer law and order and punish the law breaker and the aggressor. Life would be intolerable if each of us insisted on retaining his sovereignty. We would walk in fear and trembling as to what was going to happen to us. Each of us would be armed to the teeth and we should see that anarchy in our private lives, which as individuals we have forsworn, but which we are still prepared to accept in our international lives.
The same thing is true of civic and provincial sovereignty. We have surrendered to our country, Canada, certain rights concerning the defence of the nation, the trade and commerce of the nation, the banking and currency, the foreign policy of the nation, and as a result of that surrender we find that all of us are stronger, and each of us is freer.
There may be in the minds of some the idea that a greater union would betoken some disloyalty on our part. I dispute that. My loyalty to my family does not weaken my loyalty to Canada. My loyalty to my church does not infringe upon my loyalty to Canada. .My loyalty to the city from which I come does not decrease my loyalty to Canada. Instead it is part of the greater loyalty.
Of course there are those who will fear we are merely building a superstate; but not if you accept my premise of union founded on the individual citizen. The individual citizen will elect his representatives to the union government, composed of a bicameral legislature, I presume. Thus you will see that no superstate is envisaged, for the individual is paramount. All that we will surrender will be these things which will lead to our greater safety, our greater welfare when done collectively. Nor do I see any conflict with the United Nations charter. The United Nations unhappily is essentially an instrument of diplomacy. It cannot give us that security which we want in this world, and as an indication of that certain of us have joined the North Atlantic treaty organization so we can have a greater security. I believe that this union could be a member of the United Nations without infringing upon the charter of that organization at all.

A greater argument, a more valid one, is that the citizens of North America might not be willing to surrender part of their standard of living to other peoples; but I retort again that if a war comes they will have to surrender part of that standard of living, and the people of the United States have been doing it through the Marshall plan, as we to some modified extent shall be doing it through the Colombo plan.
Earlier 1 said there were material things which we could achieve. There is something greater which we can achieve. There are spiritual achievements awaiting us. Today the morale of Europe is not nearly as high as we should like it to be. There is a sense of defeatism in certain areas, a desire for neutralism, a desire not to fight but rather to live no matter under what circumstances. I believe that if we were to offer these people, who are our potential allies, this concept of union, then Europe would be stirred to its depths by the fervour which made liberty, equality and fraternity a battlecry which resounded all around this world. We should find that fear would give place to hope, doubt would be replaced by certainty, and indecision by decision. We could once again rekindle the flickering lamps of their faith. Here would be the sort of leadership which the souls of men the world over today are groping for. As Walter Reuther said:
The best chance of saving freedom and achieving peace is in an action so challenging, so vast in scope, so practical in design and so sincere in purpose that it fills the moral vacuum in the world with new and with reborn hope.
There are still those who will say it is not possible. My answer is in the words of a French general in the first world war: C'est impossible; done faisons-le.


Lester Bowles Pearson: Mir. Speaker, I feel I should say a few words about this resolution which has been moved in such eloquent terms by the hon. member who has just taken his seat. I should say at once that I support, and I think the government supports, the purposes and principles and the idealism which underlie this resolution. But I am not myself certain that those purposes could best be achieved or those principles best implemented by the procedure recommended in the resolution.
As has been pointed out, the resolution requests the government to "take into consideration the advisability of supporting the calling of a convention of delegates from the democracies which sponsored the North Atlantic treaty and representing the principal
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political parties of such democracies, for the purpose of exploring how far their peoples, and the peoples of such other democracies as the convention may invite to send delegates, can apply among them, within the framework of the United Nations, the principles of federal union."
The meaning of the resolution, then, is quite clear. It is interesting to note that a resolution in almost these same terms was discussed in Washington-last June, I believe it was-and also in the autumn of 1950, by the Senate of the United States. A resolution in these terms, or in terms very similar to this resolution, has also been discussed in the other place, here.
The discussion in Washington resulted in no decision being taken at that time by the government of the United States. But a report on this very important matter was made by a Senate subcommittee of the Senate foreign relations committee, which set out very clearly and very effectively the pros and cons on action of this kind.
The administration in Washington, however, has expressed its views already on this matter; and possibly it might be of interest to the house if I read from a statement made before the Senate subcommittee by the assistant secretary of state of the United States in which he gives the administration's point of view on the question. At that time, February 15, 1950, the administration's point of view was expressed by their spokesman, the assistant secretary of state, Mr. Hickerson, as follows:
We believe-
That is, the United States government.
-that progressively closer association, by limited and practicable steps on the basis of common interests, and in support of the purposes and principles of the United Nations, within as much as practicable of the free world, is both necessary and desirable.
And then he went on to say:
In the development of such closer association, care must be exercised not to set in motion forces which will render more difficult the maintenance of the solidarity of the free world in support of the principles and purposes of the United Nations.
In a number of countries in the Atlantic community progress in both the national and international fields has resulted from the willingness of certain groups to accept sacrifices primarily on the basis of national interest. It will take a very long time before similar strong loyalty to a new political unit emerges. We believe-
He said,
-that under the present North Atlantic treaty arrangements we are utilizing this force in the most constructive way at this stage of development in international relations. The establishment at this time of such a federation-
As is proposed in this resolution.
-far from providing additional strength, could be a source of weakness and greater internal divisions.

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Furthermore, the effective operation of democracy in some of the suggested participants is severely hampered by the system of splinter parties which might be carried over and even intensified in such a federation.
And then he ended in this way:
The proposed resolution-
That is, the American resolution.
-directs its attention primarily to calling a convention to explore the possibilities of Atlantic union. We believe that if the government should sponsor such a convention at this time it would raise false hopes. If the convention did not succeed it would lead to reactions unfavourable to the cause of collective security. Under present circumstances such a convention appears more likely to bring to light and emphasize the divisions among the proposed members of the Atlantic union than to lead to substantial progress in the desired direction. In view of these facts the projected convention would seem likely to weaken rather than to strengthen both the Atlantic community and the United Nations.
That, Mr. Speaker, remains, as I understand it, the attitude of the United States government toward a development of this kind. I think it is quite clear that without at least the co-operation of, and I would hope in this case possibly leadership by, the United States government, it is not likely to be practicable to convene a convention of the kind indicated in the resolution.
I am not suggesting for one moment, nor would I want to give the impression, that we disagree with the principle embodied in the resolution, or that we would minimize in any way the necessity in the present dangerous international situation of the closest possible kind of international cooperation among all the nations of the free world-not only the seven supporting nations under the Atlantic treaty. I would not take my stand for one moment in respect of a resolution of this kind on the desirability or essentiality of unrestricted national sovereignty.
National sovereignty has played its part- its very important and constructive part-in building up the nation-state out of feudalism, and in progress toward democratic liberty and social advancement. But I agree with the ion. member who has just spoken that we are living in an age today different from that in which national sovereignty emerged. We are living in an age, not so much of independence, important though that may be, as of interdependence. It would be, not only unwise, it might even be disastrous, if we clung to any barren, negative, legalistic interpretation of national sovereignty. Why, every time we sign a treaty with some other country we give up some part of our national sovereignty-or, as I prefer to put it, we are making our sovereignty work for us in the interests of peace and security by pooling

our sovereignty with other like-minded states; so that by giving something up we get more.
As I see it, there is no possibility of preserving peace or establishing security by basing our policy on any legal, narrow interpretation of national sovereignty. So if I have hesitation about this resolution, and I have, it is not because I am clinging to that, in some respects, and some respects only, outworn ideal. It would not be of much help to us in this country if we lost everything else and saved our sovereignty.
I think that this process from the single nation state based on the Austinian theory of legal sovereignty to groups of interdependent states is an important one and should go forward. It is going forward every month and every year. If this development is to be effective however, if it is to be constructive, I suggest that it must be gradual and not get too far in advance of public opinion in the various nation states of the world who would become part of any such federation as that which is visualized in this resolution.
Further, a world federation, such a Tenny-sonian concept, if I may call it that, is not an end in itself, but merely the means to an end. That end is peace and international co-operation. A federation itself is not any assurance that these ends will be met, either internationally or even domestically. The belief that federations inevitably prevent war domestically was shattered finally, I should think, in 1861 in the United States. The choice before us is not between federation and survival but between collective action and survival. I am not sure that in the present circumstances the latter is not even easier without forcing the former.
Certainly the problems inherent in international co-operation would not be exorcised by taking our stand on anything like federal union, especially a federal union where power would be so unevenly divided between the dominant United States and a country like Luxembourg. I think our own commonwealth of nations offers the best example I can think of international co-operation on the closest intimate basis without federal institutions or without federal union of any kind being found to be necessary. As a matter of fact if we had had to institutionalize our co-operation within the commonwealth that co-operation might not be as close as it is today.
So there are difficulties in the way of carrying out an advance of this kind, because it would be an advance, If we do not understand those difficulties and if we plunge headlong into a conference of this kind without

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understanding them, we might very well find that far from having made progress we would have set back the wheels of progress. Some of the questions which would come before any convention of this kind leap automatically to one's mind. How far would the people of the various countries go in altering their own form of government and accepting the basic economic and social changes which must inevitably follow through the federation? For instance, how far would they go in 1951 in giving up control over exports, imports, currency, taxation, finance and immigration?
A constitutional convention of the type visualized in this resolution, if it did anything at all, would have to deal with these matters at once. I suggest that in doing so it would raise far more problems than it would solve. It would raise hopes which could not in the nature of things be realized at this time. It might be followed by disappointment and disillusionment which would set back rather than advance the cause of closer union and more intimate co-operation.
A convention of this kind might even cause among the free nations which would be invited to it confusion and division and possibly even disunity. Far from assisting in the move toward federation itself, a premature attempt at this time might set it back. The hon. member who has just spoken has pointed out that in the first instance a convention of this kind would include only the seven powers that have sponsored the Atlantic charter. As he pointed out, it is true that provision could be made for inviting other countries to attend later.
The seven sponsoring powers are the United States, the United Kingdom, France, the Netherlands, Belgium, Luxembourg and Canada. We would inevitably run into difficulties when we began to pick and choose other powers to join us in this constitutional convention. That kind of discussion in a convention of that kind would not, as I see it, be conducive now to achieving the ends which are desired by us and which are expressed in this resolution.
I think it might be particularly confusing at this time to have a convention of this nature because of the steps that are being taken and the progress that has been made already in Europe toward a federation of European states. Very important discussions with far-reaching consequences are taking place looking toward European union and the creation of European machinery. While those discussions are important and I think filled with hope, they have indicated already some of the difficulties in the way of even a European federation. To superimpose at this
time on those discussions the wider discussion of an Atlantic federation, or a federation even wider than the Atlantic, would not I think be helpful toward the very important movement which has developed in the way of European unity.
I pay a sincere tribute to the idea behind this resolution which I think we all hope will be realized one day, but I do not think to associate ourselves at this time with such a hypothetical invitation would be well advised. There is one further difficulty which I have not mentioned, the relationship of the commonwealth countries to a convention of this kind. Would they all be included, or would only some be included? If only some were included, would not that mean a possible weakening of the links between all the commonwealth countries?
I think I should mention to the house that this question is now once again before the United States congress in its current session. A few weeks ago the Prime Minister (Mr. St. Laurent) received a letter from Senator Guy M. Gillette. He was writing on behalf of a number of senators who are sponsoring a resolution of this kind before the senate. I am not going to read the whole letter but I should like to read a couple of paragraphs from it. It is addressed to our Prime Minister (Mr. St. Laurent) and is dated January 24, 1951. In its opening paragraph it refers to the resolution now before the United States senate. Senator Gillette goes on to say about that resolution that it represents-and I am quoting from the letter:
... an effort to improve upon our first essay in Atlantic collaboration. It proposes that the original seven sponsors of the North Atlantic treaty send delegates to a convention to explore how far the Atlantic community is willing to go in merging its political, diplomatic, military and economic resources for the common good.
In that sense it is almost the same kind of resolution we have before us this evening. Then Senator Gillette ends his letter as follows:
Some of us are engaged in forming, among members of the United States congress, an informal committee to advance this exploratory effort. It would be of great value if you would inform us how far your views on ways and means of meeting the present crisis accord with those set forth above and whether you would be prepared to form a similar group within your parliamentary body.
The Prime Minister replied to that letter on January 31, as follows:
Dear Senator Gillette:
I duly received your letter of January 24, regarding the concurrent resolution standing in the name of Senator Kefauver, yourself and a number of your colleagues, calling for exploration of the possibilities of forming an Atlantic union.
I think you will appreciate how embarrassing it might be for both countries if the head of the

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government of one of our countries were to express himself about the content or efficacy of a specific proposal which was under consideration in the other country, and on which a conclusion had not been reached. You may be assured, however, that should the resolution pass and the president carry out the request contained therein, it would receive the most careful consideration of the Canadian government.
As for the possibility of forming a similar group in the Canadian parliament, and particularly in the House of Commons, this is something which it would not be possible, because of our different constitutional structure, for the head of the administration to sponsor, unless and until the policy proposed had become a definite policy of the administration. Since the success of the proposal contained in your resolution would clearly depend upon the initiative being taken by the United States government, it would, I feel, be premature for our administration to take any initiative until a decision had been reached in principle in Washington. That, of course, would not preclude the advocacy of similar proposals by private members of our parliament; as was the case in respect of the resolution considered in our Senate last year.
I regret that I cannot be more specific in my reply, but I can assure you and your colleagues in the United States senate that any action which will have the practical effect of strengthening the North Atlantic community will, I believe, meet with a favourable response in Canada.
Before I sit down I should like to point out to the house that action is already being taken to strengthen the north Atlantic community under the North Atlantic pact. It does not go as far of course as this resolution would have us go, and progress may not be as fast or as far as some of us would like, but progress is being made in implementing article 2, for instance, of the North Atlantic treaty. Effective liaison arrangements have been worked out between members of the North Atlantic group in economic matters- especially, I admit, economic matters concerned with defence. The North Atlantic treaty organization and the OEEC have established effective working relationships, and indeed I think it may not be going too far to say that some of the economic functions which are now being performed by the office of European economic co-operation will be taken over by the North Atlantic treaty organization. We are also discussing the building up under the North Atlantic organization of a permanent international secretariat. So we are making some progress at this time under the North Atlantic organization toward the development of a north Atlantic community. I would suggest, Mr. Speaker, that at this time that is the most effective way by which we can work towards achievement of the fine objective put forward in this resolution.
I said not very long ago "that our North Atlantic alliance may provide the foundation for a great co-operative economic commonwealth of the western world which one day may become a political commonwealth. You may say that this is unrealistic nonsense but

I suggest that in this jet-propelled atomic age no plan less than this will be adequate, no vision less than this will do." So far as I am concerned I stand by those words, but I do not think that at this time the calling of a conference of the type indicated by the resolution would make any appreciable advance to the attainment of the ultimate objective, which remains a commonwealth of the free world. Therefore, in order that we in this house may not give the appearance of division and disunity on a matter as to which we are all fundamentally united, I would venture to express the hope that this resolution may not be pressed to a vote at this time.


Mr. Speaker:: Is the house ready for the question?


Alistair McLeod Stewart: If I have permission, Mr. Speaker, I am prepared to withdraw the resolution.
Motion withdrawn.



INDUSTRY


Clarence Gillis: That, in the opinion of this house, the government should give consideration to a program for the decentralization of industry, so as to make possible a more balanced economy and for protection in the event of war.
He said: Mr. Speaker, the subject matter of the resolution is one that has been raised on a good many occasions in this house, generally by way of interjection into a debate where no definite expression of opinion could be had. I thought it was advisable at this time to place this resolution on the order paper for the purpose not only of having a definite discussion of the matter but also of getting a decision in the house by way of a vote as to what, in the opinion of hon. members, is the solution of the difficulties that I am going to attempt to set out. At the outset I want to say that I do not believe in introducing a resolution for the purpose of getting a discussion, and then withdrawing it. It is either worth getting a decision on or it is not worth putting on the order paper.
The question of decentralization of industry in Canada has occupied the minds and attention of a great many people. The premier of Ontario made a statement at the last dominion-provincial conference on December 4 to 7, 1950. I am not going to read that statement, which appears on pages 21, 22, 23 and 24 of the report, but in it he set out that the great centralization of industry in Ontario

had brought this province additional problems and responsibilities they were finding it rather difficult to handle at the present time. Industry was concentrated in this province from 1940 to 1949 to such an extent that a terrific power shortage developed, and the province had to embark upon a power program that is taxing its financial resources. In addition a labour problem was created, and as a result they not only had to bring in labour from other provinces but were thinking of importing labour from overseas in order to complete their power program. There were also problems in connection with the expansion of hospital services, medical services and other services of that kind. In effect I would read into the statement of the premier a plea to those now responsible for the planning of additional expansion in this country for greater equalization all across the country in order to relieve Ontario and Quebec of many of the social problems created by the overexpansion of industry in these central provinces.
I have dug up a few figures. First I want to say, however, that this is not a problem that developed only last year or the year before. I am going to speak particularly of the maritimes, though the western provinces are in pretty much the same position, and I expect western members to speak for them. I would point out that the trend towards centralization in Ontario and Quebec has not . changed very much in the last twenty years. In my opinion the difficulty arose sixty years ago or more, and I should like to call the attention of hon. members to a few very pertinent facts.
At confederation the maritime provinces were the richest part of this country; there is no disputing that fact. When Nova Scotia and the maritimes came into confederation they were given certain definite promises by way of maritime rights. The idea of confederation was that we were building one nation, and there was to be greater opportunity to expand the industries, and develop the resources of the maritimes through the creation of a great central market for those provinces. Let me point out what happened in the field of finance. At the time of confederation we had in Nova Scotia the Merchants Bank, the Bank of Nova Scotia, the Halifax Banking Company, the Bank of Yarmouth, the Commercial Bank of Windsor and the Union Bank of Halifax. All these banks were staffed by Nova Scotians. They were handling Nova Scotia capital, using the finances of the province for the purpose of building up commerce and industry there. After confederation all these banks disappeared; they moved west and were centralized in Quebec and Ontario. In that
Decentralization of Industry way Nova Scotia lost control of her own finances. Instead of the capital which was siphoned off and taken into the central provinces being used to promote commerce and industry in the maritime provinces, it was used to bring about the centralization we have today in Ontario and Quebec. We lost control of our finances, and we lost our ability to promote industry and commerce in the maritimes.
That was strike one against confederation. Now let me go through a list of some of the industries we lost at that time. We had a cotton mill in Halifax, for the information of the senior member for Halifax. We also had a cotton mill at Windsor. We had a paint works at Halifax, three tobacco factories, five shoe factories, two soap factories and three woollen mills. We had a cheese factory at Antigonish that won a prize at a world's fair several decades ago, and a condensed milk factory at Truro. At Sydney we had a fertilizer plant and a large tar and chemical works. These industries have all disappeared. If you read Norman Rogers' economic survey, which can be obtained in the library, you will find that up to 1935 the maritime provinces had lost some 202 industries to the central provinces.
I said the trend had not changed very much in the last twenty years. I have the figures here showing the 1929 gross production by provinces on a percentage basis, and they were as follows:
Percentage of gross production
Prince Edward Island	 0T
Nova Scotia	
2	0New Brunswick	
2	0Quebec	
30	*	0Ontario	
52	0Manitoba	
4-0Saskatchewan	
2	0Alberta	
30British Columbia	
7-0
Then I have the figures for 1945 to 1949, also on a percentage basis; as I said, the trend has not changed much in the last twenty years. You see, they got everything they could in the two central provinces; they are holding on to them, and there has been no attempt on the part of the government or on the part of risk capital to change the picture. Here are the figures:
Percentage of gross production
Prince Edward Island	less than
Nova Scotia	
New Brunswick	
Quebec	
Ontario	
Manitoba	
Saskatchewan	
Alberta	
British Columbia	
20
260
50
70
694

Decentralization of Industry 'There has been a bit of a shift, but if you look at the figures showing population trends I think you will see that the slight shift from Ontario has gone to British Columbia. Here are the figures for the period 1945 to 1949, in relation to population increase:
per cent
Prince Edward Island	 2
Nova Scotia	 4
New Brunswick	 [DOT]	10
Quebec	 9
Ontario	 10
Manitoba	 [DOT] [DOT]	*
Saskatchewan	 2
Alberta	 5
British Columbia	 17
There has been a shift of about five per cent in the gross production of the country as between Quebec and Ontario and the rest of the country, but that shift has gone to British Columbia. That province has benefited by this swing, and I think that is because of the increase in population. The point I am trying to make clear is that the inequalities as between province and province in this country were fixed back about fifty years ago. Everything possible was siphoned off and centralized, including finance, industry and so forth. There has not been in the last twenty-five years any attempt on the part of the government or on the part of private industry in this country to rectify that situation. It has remained practically stationary. What I am trying to prove to the government is this. That is what has taken place in the past. There is not much use in holding a post mortem. But there is no reason why we should not take a look at the matter for a minute or two in order to show that there has been an extremely unequal distribution of the wealth of this country as between province and province. There is no indication that that 66 per cent concentration of the manufacturing and of the gross production of this country that is centred in those two provinces is justified by population trends. It certainly is not.
During the last war the government had the chance of planning their defence production in such a way as to leave in the various provinces some industry that could be utilized for peacetime purposes. All during the last war, while the government was going into their defence program, we on this side of the house argued and argued that we should at least decentralize our defence production to the greatest possible extent and that we should decide on the plants we would establish, having in mind the fact that the population of this country was going to be increased to a greater and greater extent by immigration. That is also true of the future.
[Mr. Gillis.l

We are starting in again to plan a huge defence program. It means not only swinging over a certain percentage of the plants that are now in production but it also means that the basic steel industry, for example, will have to be expanded. The logical place to expand the basic steel industry is in Nova Scotia. There is no arguing against that statement. Most of our defence planning at this time is to equip our allies overseas. Those who are taking part in the North Atlantic pact defence program are our allies for the future and will be for a long time to come. Our major contribution in that field is going to be the supplying to them of guns, munitions and vehicles of war. If we are going to ship that material overseas, what is the logical place to ship it from if we are not thinking in terms of profits and dollars for General Motors, Chrysler and some of those people? If we are really honest about wanting to make our maximum contribution with the least possible expense to the taxpayers of Canada, the place to produce guns and steel and what-have-you is where you have your raw materials and where you have your largest unemployed force in Canada today. Do not forget what Uncle Sam is doing. Two, three and four years ago I rose in my place in this house and argued about this iron ore development. We passed a bill here handing over the iron ore deposits of Labrador and Ungava to Hol-linger and these holding companies in Canada but with the main direction over in the United States. We passed a bill here by which we gave them the right to take over the iron ore deposits and develop them; and now we sit back and talk about expanding the steel industry down in Hamilton. Is it not rather a ridiculous thing, if you stop and think about it for a minute? One-third of Canada's basic steel is produced down there in Sydney, Nova Scotia. Right across the water, ninety miles away at Wabana, the iron ore is there. Thirteen miles away they have unlimited supplies of good steelmaking coal, where your unemployed lists are the greatest of any in any part of the country, and those boys are steelmakers or coal producers. They fit right into that picture logically, but they are walking the streets. Is it logical to suppose that we turn out that raw steel and haul it all the way up to Ontario and Quebec to have it processed? Do not forget that you pay a subsidy on hauling that raw material up across Canada. Then when it is processed and you have turned it into guns or vehicles, you haul them all the way back again to Halifax or down to Sydney- because that is where they are shipped from1-put them on a boat and ship them over to Europe. All during the last war at
69$

least two hundred ships a day went in and out of Sydney harbour, making the crossing back and forth across the Atlantic. Let us save that two-way rail haul this time. Let us establish a plant or two down there. Let us expand the steelmaking facilities down there.
I pick up the newspapers every day and note that the Americans are decentralizing their steelmaking industry in the United States. They are shifting their plants down to the states of Maine and New Hampshire. Down on the Atlantic seaboard they have routed in or are in the process of routing in four different big plants. We said that two years ago. We said that there was going to be a major shift in the basic steel plants in the United States. That is why we wanted to hang on to our iron ore deposits. But we did not manage to do that. The Americans have control of that ore. Now they want the seaway opened up. Two hundred and forty million dollars will be Canada's share of opening up that seaway to give them access to that raw material in Labrador, which they will haul up there by boat, by-pass your eastern ports altogether and in the future they will be supreme in steel on this North American continent. We had it in our hands to be supreme but we did not take advantage of the opportunity. We passed the charters on to somebody else who will do the exploiting. I am making a plea at this time that the government look at this matter not just as a two-year or three-year program, something that is going to be over when the war is over. I want the government at this time to see this as a program that is going to last for as long as we are going to last; because this defence business is something we are going to have for a good many years to come. Let us plan these industries in such a way that while they are of necessity now making war materials, we shall be able to convert that plant for the manufacture of something for the overseas market possibly, in that end of the country, in the years that lie ahead.
I am making a plea for the decentralization of industry as it exists today. In the event of war, if we have 66 per cent of our gross production concentrated in those two central provinces, what does it mean? It merely means this. If 26 per cent is in the province of Quebec, then about 24 per cent is on the island of Montreal. What could a plane with a couple of atomic bombs do by coming in over the island of Montreal and dropping them in there somewhere? What would happen? About 24 per cent of your gross production would be knocked out overnight. If you have 40 per cent of your gross production in the province of Ontario, where is
Decentralization of Industry it centred? There are only two or three places you have to hit; they are Hamilton, Windsor and Toronto. That is where your real manufacturing is done. If we mean what we say to the Canadian people, that they are going to be taxed higher, that they are going to have to pay a great deal more money, that we are going into a heavy defence program which is necessary, that there is danger of atomic attack on this continent, then we should start planning for that and start decentralizing to the greatest possible extent the industrial set-up of this country today.
I merely wanted to raise this question because in every paper I pick up some great economist-I do not bother reading them any more-has a long story, about professor somebody saying that the government is recognizing to the greatest possible extent the great wealth of the maritime provinces and telling what they are going to do to develop it. I have been listening to that sort of thing for the last fifty years, but it just finishes up by being a speech; that is all, nothing is ever done about it. The steel workers' union come and present a brief to the cabinet of Nova Scotia. They are demanding some expansion of steel in the maritime provinces and all that kind of stuff. The cabinet meets them and says "amen", the brief goes into the waste basket and that is the end of it. That sort of thing has been going on for the last fifty years. I thought it time that I should bring the matter before the house so that there could be a definite and specific discussion. I do not want the resolution withdrawn. I want hon. members to discuss it. I want the cabinet, which is responsible in the years that lie ahead for planning our production, both for defence and internal economy, to tell me what they mean when they say that they recognize the great potentialities of the maritimes. I want to know what they are going to do about it. What are they going to do to restore the 202 industries that have been siphoned off? For example, take fertilizer: one of the largest plants ever developed in this country was at Sydney, Nova Scotia. It employed 1,700 people. In the 1930's it was siphoned off and came up to Toronto. Today that plant is manufacturing fertilizer and shipping it down to the farmers of Nova Scotia at a cost of about $90 a ton, and the federal government is paying most of the freight rates on it. It would have been better if that plant had stayed there, and that goes for a lot of other things that have left the maritime provinces.
One member of the cabinet not so long ago indicated that he was getting a little tired
696	HOUSE OF
Decentralization of Industry of listening to people of the maritime provinces bringing their complaints. It is not a complaint; it is not a request for charity; it is a matter of restoring the things that belong to that part of the country that were siphoned off because the provincial leaders were honest enough to accept the word of the fathers of confederation that they were coming into confederation for the purpose of developing a country where there would be greater opportunities for their products in a central market. Instead of that tariff walls were built to protect the manufacturers of the central provinces. We have to buy in a wholly protected market, and we have to sell in that market. Yet there is absolutely no protection for what we produce in that end of the country.
I should like to see this matter discussed. I discuss it from the standpoint of a member from the maritime provinces. I see these same arguments that I am using for that end of the country applied to British Columbia, Saskatchewan and Manitoba. They are not getting a square deal. I do not think it was ever envisaged by the fathers of confederation that 82 per cent of the gross production of this country should be centralized in two provinces, and that tariff walls to protect the manufacturers of those provinces should be built to the detriment of the rest of the country east and west.


Right Hon. L. S. St. Laurent (Prime Minister):: I am sure we are all in sympathy with the objectives of the hon. member, but I am equally sure that there cannot be very many of us in sympathy with the arguments he used to try to reach those objectives. A few minutes ago he said that practically everything that had been going on for the last fifty years finished in speeches. Well, I think when the hon. member reads tomorrow what he said tonight he will find that there is more of a speech than anything constructive in what he has put before the house tonight. His last assertion was that tariff walls have been built around this country to protect the manufacturing interests of the central provinces. The tariff walls are walls that protect all the industries of the country wherever they are located, and those tariff walls were built a good many years ago.
In spite of that, what the hon. member refers to as a siphoning off of industries seems to have been taking place. He refers to one that was siphoned off from Sydney to Toronto in the 1930's. Well, I do not know how the siphoning process was brought about, but I am sure the hon. member is not suggesting that the government had anything to do with the siphoning off of the industry; that was something which was decided by those


who had control of the industry. Of course I admit that those who feel that these industries should be owned and administered by the state can complain of the way their owners, who operate under the profit system, are letting their interests influence the location of these industries.
But then the hon. member says that if less thought was given to profits for General Motors, Chrysler and the others, some industrial expansion might take place in the maritime provinces. Well, if the investments are going to be made by General Motors, by Chrysler and by such other private enterprise groups, they will think of the profits to be made, and they will be apt to pick out for their plants such locations as are likely to produce the best returns on the investments made.
The hon. member says that there were 282 industries in the maritime provinces at the time of confederation-


Clarence Gillis: Two hundred and two.


Louis Stephen St-Laurent: Two hundred and two; of the 202, one was a cheese factory and another a butter factory. I would be surprised if there were only two cheese or butter factories in the maritime provinces at the present time. There have been many more established everywhere else in Canada since that time. Yet I do not think it was required to siphon off any that existed anywhere else in order to get them going in other localities.
The hon. member gave the figures for the national production in 1929. He said that of the total, Quebec then had 30 per cent and Ontario 52 per cent. He then gave figures for 1949, I think it was.


Clarence Gillis: The years 1945 to 1949.


Louis Stephen St-Laurent: Well, in that period Quebec had 26 per cent and Ontario had 40 per cent. The two central provinces have thus fallen in those two decades from 82 per cent to 66 per cent, while according to the figures given there would have been practically no change in the proportion of the maritime provinces. Still there has been an increase from 14 per cent to 29 per cent for the four western provinces. That is something which certainly has not -siphoned off anything from the maritime provinces, but rather it is something that resulted from the growth and development of the country.
It would seem that the area of the maritime provinces being smaller and more contracted that that of the other provinces, their proportion, when the other provinces were less developed, was a larger one than it happened to be when the others came to grow. There has not been the same proportion of growth

in the maritime provinces as has taken place elsewhere, and it is something which we all regret, and about which perhaps many of us have been making speeches. I hope that more than speeches will be made, but I do not think the assertions that we find in the hon. member's speech tonight will bring that about.
He speaks of us as having handed over the iron ores of northeastern Quebec and Newfoundland to United States interests. Well, the hon. member knows, as I know, that natural resources are in no way under the control of the federal government. They are under the control of the provincial governments, and any handing over, if there has been any, has not been done here in this parliament, but by arrangements that have been entered into between provincial administrations and those who wanted to invest the venture capital required for the exploitation of those resources. Personally, as a resident of the province of Quebec, I have no complaint about the arrangements that have been made for the purpose of having those resources developed.
I remember when I was very much younger having heard violent criticism of a premier of Quebec who sold water power on the St. Maurice river for $13,000. It was a terrible scandal at that time; but no water power had been developed on the St. Maurice up to then. That was the first development and those who ventured into it found that it was years before they could be assured that they were ever going to get any return on their capital. Since then the development of water power on the St. Maurice has certainly become fifty times what it was originally. This first start was made some forty years ago.
I think this is very likely to be the case in the development of the mining resources of northeast Quebec, and over the frontier, the still undetermined frontier, between Newfoundland and Labrador. The existence of ores there has been known and reported for several decades, but nothing was done about it except that possibly, from time to time, some kind of a speech was made. Well someone is going in there at the present time, venturing huge sums, to demonstrate that there is something that can be used in the improvement of the conditions of human beings; and I think it is a very good thing that it should be done.
I know friends of mine have criticized the provincial administration for the kind of deal they made. But personally I am rather inclined to think that they are to be congratulated on having made a deal that has started something in that region. The hon. member says that as a consequence of this steelmakers in the United States are moving
Decentralization of Industry their plants to the Atlantic coast. Well, possibly steelmakers here, if they will have the courage to do what others have done in developing industries in Canada, will move Canadian steel plants to the Atlantic coast. It is being done by private enterprise in the United States; and I trust there will be sufficient enterprise among the people of Canada to bring them to do likewise.
I have frequently referred to the example of the governor and company of adventurers of England trading into Hudson bay as a very good example for our people to follow. Those gentlemen adventurers trading into Hudson bay went out into the wilds and created a trade which, before their adventure, had not existed. They laid the foundations of a company which, three centuries later, is still flourishing.
A century ago, perhaps a little more than that, progress was brought about in the Quebec district by gentlemen adventurers who were building wooden ships and sending them across the seven seas and throughout the world. And they did not come back- not because they were lost: they were good ships, and they were not lost. But they went into world trade and they stayed there.
Following that period the spirit of adventure seemed to diminish in our Quebec region. There were adventurers in Montreal who went out to build the railways and they had a pretty venturesome job ahead of them. They were frequently on the verge of losing everything or of seeing others lose everything in their ventures. But-


Stanley Howard Knowles: The government helped.


Louis Stephen St-Laurent: They were assisted by
the government; and if they had not been assisted by the government my hon. friend from Winnipeg North Centre (Mr. Knowles) would not be here.
But their spirit of adventure then passed on to the city of Toronto. It was in the city of Toronto that the venture capital required to start our great mining industry, and to make it the important thing it has become, was raised and supplied.
Then, for the last few years I think many of us have somewhat regretted that the oil fields of Alberta had not attracted the same venture capital from Canadians that other industries had attracted; we regretted that most of the venture capital that went in there came from others who-I will not say "created", because the Creator himself put the oil there-but rather who brought it to the surface and are making it one of the very encouraging things in the whole Canadian economic picture at the present time.

Decentralization of Industry
Now, as my hon. friend says, we have heard about maritime rights ever since confederation. He tells me that at the time of confederation the maritime bankers were the great bankers of the British North American colonies. I have no doubt about that. The hon. member knows that in the administration of our banks all over Canada at the present time there are a great many maritimers who are descended from those bankers of preconfederation days. Private enterprise went to the fields that appeared to offer the best possibilities for getting revenue from investments-and I am sure there is no more prosperous bank in Canada today than the Bank of Nova Scotia. But the Bank of Nova Scotia, though it may technically still have its head office in Halifax-and I am not sure that it has-has its real head office, the office from which the affairs of the bank are administered from day to day, in central Canada. That is because the maritimers who controlled the institution felt that it was better for themselves and for their shareholders to have those operations conducted from Toronto.
Well, that is not something with which the government can interfere-until the government becomes imbued with the ideas of my hon. friends in that section of the house, and decides, with the approval of the Canadian people, that it is going to substitute some socialistic system for the private enterprise system, which has brought over the last couple of centuries such tremendous developments to the North American continent.
I think it is desirable to use all the influence we can to have these things spread out; and I wish to assure my hon. friend, without violating any cabinet secrets, that when these matters come before cabinet there are many who are most anxious to explore every angle by which greater dispersal of industry can be brought about, because, although we are living under a private enterprise system, we think it would be healthier for the country if industry were more widely spread out through all parts of the country. We think it would be healthier for the country if there was the teeming activity in the maritime provinces that would allow us to do away with such things, for instance, as maritime freight subsidies. We think it would be better for the country if that could be brought about, and we do give attention to it. We endeavour to use such influence as we have to that end.
I do not know anything about the making of steel; but I have heard it said that if and when the coal in the maritimes can be married to the kind of ore that would come from the Labrador mines, the steel industry of the maritime provinces would be in a much healthier condition. I do not know whether


that is so or not; but I do hear it said that the maritimes have been struggling against difficulties that came from, not the degree of skill of the men or the willingness of the men to work, but from the material they have to work with. I do not know if we are to infer from the hon. member's speech that he thinks it would not be desirable to have the St. Lawrence waterway and power scheme proceeded with. If that is to be inferred from his speech, I for one would disagree with him on that point. I think that if and when that undertaking is proceeded with, it will bring about a further advance in the industrial development of this country which will benefit, not only the central provinces but the economy of the whole nation.
If there were not in this motion submitted by the hon. member the implication that the government is to blame for not having done enough I am sure that everyone would be in agreement with the desirability of there being a greater dispersal of industry throughout the whole nation. But it is put forward as a condemnation of what has been going on in the past and of the system, not an evenly distributed one if you wish, but still the system under which this country as a whole has been making great progress in the last few years.
In that light it is not a resolution that we can accept because I do not think we should be called upon to accept blame. I do not think I should add anything because the hon. member would say that it is just another speech. He would be right, it would be another speech. I do hope that in the effort that is to be required from the Canadian people and from Canadian industry, there will be other manifestations than speeches to bring about the kind of situation which the hon. member would like to see prevailing in the region he so well represents in this house.


Mr. M. J. Coldwell (Roseiown-Biggar):: Mr. Speaker, I am surprised at the heat with which the Prime Minister (Mr. St. Laurent) has spoken-


Some hon. Members:: Oh, oh.


Major James William Coldwell: Oh, yes.


An hon. Member:: Surely.


Major James William Coldwell: -in reply to what I think was a moderate presentation by the hon. member for Cape Breton South (Mr. Gillis). As for the resolution being a condemnation of the government, let me read what it says. It reads:
That, in the opinion of this house, the government should give consideration to a program for the decentralization of industry, so as to make possible a more balanced economy and for protection in the event of war.

Let me point out that in every one of the democratic countries decentralization is being considered as a defence measure. Discussions are going on at Washington in the United States as to how best industry can be decentralized. As far as I am aware the same kind of consideration is being given, to the decentralization of industry in the United Kingdom and elsewhere. That consideration has been given there for the past several years. As a matter of fact, vast new industries have been established -away from the eastern side of the United Kingdom in South Wales, Cumberland and other parts of the country where there were resources and unemployed people. Surely the suggestion that the government give consideration to the decentralization of industry should not be looked upon as a condemnation of the government unless the government is not prepared to take steps to assist in the decentralization of industry in this country.
Let me remind the Prime Minister and hon. gentlemen in this house that some of us come from parts of the country where our constituents have had to sell in an unprotected world market and buy in a highly protected market. Those who have bought supplies in the protected market of Canada have in large measure paid for the establishment of industry in the centralized provinces of Canada.
The Prime Minister mentioned the automobile industry, and one could mention the textile and other industries that have grown rich and powerful behind a tariff wall. In some instances they are subsidiaries of corporations which are controlled outside of this country. None the less they have been built up-by concessions granted by successive governments and by the maintenance of a very high tariff wall around this country. Until very recently we could see General Motors of Canada protected from General Motors of the United States, and the Ford Company of Canada protected from the Ford Company of the United States.
The consumers or purchasers of cars or machines manufactured by these protected industries in Canada were paying $200, $300, $400 and $500 or more for exactly the same type of machine as was manufactured by the parent company on the other side of the line.


Stanley Howard Knowles: Supposedly Liberal policy.


Major James William Coldwell: May I point out to the Prime Minister that as I understand it the tradition of the Liberal party in the past was a free trade tradition. If I had been aware that this debate was coming up tonight I could have produced figures to show that in spite
Decentralization of Industry of the free trade professions of the Liberal party, between 1921 and 1930 the Liberal party maintained a higher rate of tariff on some of the things I have mentioned than was maintained by what we always assumed was the high tariff Conservative party which they succeeded in 1921. These figures are on the record. I have used them in the house before and I would have used them tonight had I known what the Prime Minister was going to say.
Moreover, I cannot quite understand why the Prime Minister seemed to think that this was a resolution formulated on a doctrinaire socialist policy. It is nothing of the kind. There was no question of a discussion of socialism and free enterprise. Had that been one of the problems I think one would make a rather different speech from the speech of the hon. member for Cape Breton South. One could have made a very good case for the public development of our natural resources had he been inclined to do so. I am not going to do that.
Having had some experience during the last war, both as to the decentralization of industry and the concessions which the government gave to industries in order to build them up in central Canada, I think the hon. member for Cape Breton South and those of us who come from western Canada have a perfect right to suggest that if encouragement is going to be given today to industry to expand or to establish itself in Canada, then an attempt should be made to decentralize industry across Canada.
I was a member of the war expenditures committee and I remember that the present Minister of Fisheries (Mr. Mayhew) was also a member of that committee. I remember that the late G. G. McGeer came before that committee, of which the Minister of Fisheries and I were both members, at one period during the war and urged that, instead of the government of Canada making great concessions to the Algoma Steel Corporation to build and expand blast furnaces in central Canada, because we were constructing ships on the Pacific coast and required steel plates there, some attempt should be made to establish a steel industry on Vancouver island where there were both coal and iron ore in close proximity.
I remember very well how the Minister of Fisheries (Mr. Mayhew), Mr. G. G. McGeer and those of us who supported that point of view on the committee were told by the steel controller that that would not be done at all, that there were established steel industries in certain areas of Canada, and that as long as they were established there that was where the steel industry was going to go.

Decentralization of Industry Moreover, he told us that the steel industry had been overbuilt in central Canada and that no more post-war capacity was required. Today of course we find that a considerable amount of new capacity is required.
Of course it is perfectly true, as my hon. friend said, that Canada's natural resources are being exploited for the benefit of corporations that have their headquarters, their capital and their profits, when the time comes to declare profits, in another country. It is perfectly true that the returns we should be getting from our own resources are being drained away from this country. As a matter of fact we know that plans are being made-and my hon. friend was right in mentioning this to the house tonight-for the building of great steel plants along the Atlantic coast of the United States, so that in a little while we shall see the spectacle of iron ore from Labrador and Ungava being transported down the Labrador coast, or by rail to a point near the mouth of the St. Lawrence and thence past the coast of Nova Scotia where, as my hon. friend said, the steel industry of Canada has existed to such a great extent. Canadian mills will be by-passed and the ore will go to United States1 mills in Massachusetts and Maine or elsewhere.


Stanley Howard Knowles: Just as it goes from Steep Rock to Cleveland.


Major James William Coldwell: Yes, just as it goes from Steep Rock to Cleveland at the present time, deposits out of which millions of dollars have been made over the years by corporations whose headquarters were not in this country. The Prime Minister says that the federal government did not make the concessions, that it was for example the Quebec government that made the concession regarding Ungava, or the Newfoundland government that made the concession regarding Labrador iron ore deposits. That is perfectly true but it was this government and this house that gave access to those fields by granting a charter- was it two years ago-to build the Quebec, North Shore and Labrador Railway for a distance of some 300 miles, if my memory serves me correctly.
Therefore when my hon. friend says that the Quebec government alienated these resources let us not forget that it was this parliament, this house and this government which made possible the transportation of these valuable resources to the United States by granting a charter for a railway. I think that the hon. member for Cape Breton South attempted to perform a service tonight. He attempted to introduce a resolution with the hope, as he said, that other members would participate in the debate, that other maritime


members would speak, that members from the prairie provinces and British Columbia would speak and that all would express themselves in favour of the diffusion of industry throughout Canada as far as we are able to do so. Bear this in mind, that we can exercise a considerable amount of influence in the diffusion of industry.
My mind goes back to the last war. What did we do? We gave accelerated depreciation to corporations that were extending their plants or building new plants. What was that accelerated depreciation? We gave corporations the right to charge, in the prices that they charged the people of Canada, an amount sufficient to write off the capital outlay of the plant and machines within two years in some cases, and in a number of cases within four years. If the government grants accelerated depreciation what is actually being done is that we say to the corporation: You build the plant, the people of Canada will pay for it, and at the end of the time you will own it.
Not only that; in some instances we said to them: You can charge into your selling price an amount that will enable you to collect on your product a sufficient sum to retire the value of the plant you have built. With respect to some of these plants at least I have noticed that when we allowed them to charge so much more than was necessary to return a fair profit on their investment and to pay for their plants in wartime we set a price level which they have been maintaining ever since. I have not noticed a drop in the price level of some of these commodities produced in plants that were written off by accelerated depreciation and paid for by the Canadian people.
Therefore I say to the Prime Minister that my hon. friend's plea tonight was reasonable. It was not based on a discussion of any partisan policy or any doctrinaire viewpoint. The idea of diffusion was brought forward exactly as similar ideas are being brought forward in other countries, as a war measure. We need diffusion. Look at the way in which industry was concentrated in this country during the last war. You only had to go to the Niagara peninsula, to Welland, St. Catharines, Hamilton and so on, to realize how concentrated industry has become. If we are going to be in danger of bombing, such concentrated industry will make a very ready target for bombs which may reach this country in the event of war.
Let us hope of course that will never happen. Nevertheless it seems to me that when my hon. friend rose to speak tonight he did so for the purpose of putting before the house and the government a problem which I think the Prime Minister would have been well

advised to allow private members of the house to discuss pretty thoroughly before rising to summarize the debate. I am quite sure that the Prime Minister did not do so intentionally but I sincerely hope that his remarks tonight will not inhibit members of the house from rising to their feet and saying what they would have said anyway.


James Arthur Ross: Mr. Speaker, I want to endorse the motion introduced by the hon. member for Cape Breton South (Mr. Gillis). I think there was considerable logic in his argument. I was a bit surprised to see the Prime Minister (Mr. St. Laurent) enter the debate as soon as he did, and to hear him make some of the statements that he made because, quite frankly, in the past war the government of the day lost a great opportunity to decentralize industry to quite an extent in Canada. I have not the figures before me at the moment, but during those years I remember discussing the hundreds of millions of dollars the government were spending to assist industry to produce more. I forget the percentages also, but I do know that by far the greater proportion of that money went to the two central provinces. There I think the government missed a great opportunity to decentralize.
The Prime Minister spoke about tariffs and protection. The people in the prairie provinces have laboured for a long time under protection, and today under this government I think we have more protection, much of it disguised, than at any time since confederation. That is my opinion in spite of all the statements that may come from members of the government. The Prime Minister also said the government had never done anything toward centralizing industry. Well, only a few years ago we had a concrete example in the case of a government-owned institution, Trans-Canada Air Lines. The headquarters of this great corporation were moved from Winnipeg to Montreal.


James Sinclair: A good move.


James Arthur Ross: That was done by the government, and it is a matter of opinion whether it was a good or bad move. The premier of Manitoba, the heads of the chamber of commerce, the mayor of Winnipeg and representatives of many organizations came to Ottawa to interview the government in an attempt to retain Trans-Canada Air Lines in Winnipeg. That was a move by this government which brought one of its own institutions to the central provinces, and I do not think that was good business. With all this fear of atomic bombing if we have a war, certainly it was not good business. Winnipeg is about halfway across this country, and
Decentralization of Industry surely it was the logical place for the headquarters of that company. Many of the officials owned their own homes there, and had to dispose of them and move their families to Montreal.
On another occasion I dealt with another industrial development, the flax processing plants built in Ontario during the war years. I pointed out at that time, as I have done since, that practically all the flaxseed required for that processing is grown in the three prairie provinces. There we were with an overburdened transportation system, a shortage of rolling stock and a shortage of manpower, moving great quantities of flaxseed from the prairie provinces to Ontario for processing, then turning around and taking a large proportion of the by-products back to the prairies for feed.
This is a complicated business; one thing leads to another. Nearly all the large farm implement companies are located in Ontario, though it is quite true that was their own decision. Yet sixty per cent of their production is sold in the three prairie provinces, and the farmers out there have to pay the added freight. That is another thing you can never get away from. The people in the prairie provinces buy everything plus freight, while their grain, livestock and everything else is sold less freight. That in itself is a great handicap and I think is unfair. We have the great concentration of population in these central provinces. Those people have to be fed. Eastern farmers find it difficult to grow enough feed grain, so the taxpayers of Canada have to subsidize the movement of feed grains from the prairie provinces to the east. The farmer out there who produces the grain pays his share of taxation also. That was a war move, but you see what it has developed into. We are still doing it today, eight years later, and in the meantime we have spent something over $140 million of the taxpayers' money to move this grain to where it can be fed by the farmers living closer to the industrial sections; and this in spite of the fact that in one of the later war years Alberta produced more hogs than any other province in Canada. We hear so much of sound economics and sound finance, yet this is the complicated set-up the government are working us into by this business of centralizing industry of all sorts. There is just no end to it, and every move of that kind is an added burden to the taxpayers.
Then the Prime Minister said they would do everything possible to decentralize industry. Well, I am afraid nothing much has been done yet. Of all the defence contracts let in the past nine months, over eighty per

Decentralization of Industry cent have gone to the two central provinces again. It does not look as though much of an effort was being made to decentralize industry. I venture to say that with a little assistance many of those contracts could have been filled in the maritimes, the prairie provinces and the west coast.


George James McIlraith: If I may ask the hon. member a question, will he tell us where he got his statistics with respect to the percentage of contracts let in the central provinces?


James Arthur Ross: I read it in a Canadian Press article last week. As I said when I rose, I have no material before me; I did not know this resolution was coming up. I have volumes of material and statistics in my office, but nothing on my desk.


George James McIlraith: I am quite sure the hon. member does not want to mislead the house-


James Arthur Ross: I would be glad to have the correct percentage, if the parliamentary assistant has it.


George James McIlraith: The percentage given was not accurate. The information was given in the House of Commons the other day and may be found at page 452 of Hansard. The hon. member will notice that those statistics do not give the source from which the products will come, but merely give the places where the contracts were let. I can perhaps illustrate what I mean by pointing out that contracts to firms such as the Burns Packing Company are listed as having been let in Ottawa or Ontario.


James Arthur Ross: Could the parliamentary assistant tell us what percentage of these materials will be supplied by the two central provinces?


George James McIlraith: No; that information cannot be procured.


James Arthur Ross: I would be glad if the hon. gentleman could give the correct figure. As I say, I was quoting a press dispatch, and I assume those people had authentic figures.
Then there is the matter of this accelerated depreciation, which was mentioned by the previous speaker. This is a matter that has been quite a bother to me for the past few years. I had thought it was just as important that if a farmer were short of funds to produce worthwhile foodstuffs for the war effort, he should be assisted just as certain other industries were. I have never been able to understand why a good farm operator, who had to invest large sums in equipment or plant expansion, should not be allowed the same kind of depreciation as these industries mentioned a short time ago by the hon. member


for Rosetown-Biggar (Mr. Coldwell), who were allowed to write off their added costs in two, three or four years. That is not permitted under the act. That is another very unfair regulation of the Department of National Revenue, and there are many instances of that kind in which I believe the government should give far greater leadership if they really wanted an all-out effort. I cannot say an all-out war effort, because this is really an effort to prevent war. We are hoping it will succeed, but it may lead to war.
I do not want to take more time this evening, but I would like to plead with the government again to use their great power and influence to decentralize industry, because certainly that would be in the interests of all parts and all citizens of Canada.


Mr. Carroll:: By decentralization of industry does the hon. member mean the giving out of war contracts in better proportion to the various provinces or does he mean to decentralize the industry that is carried on in this country as usual outside of war?


James Arthur Ross: I mean both, Mr. Speaker. I gave one concrete example. You will realize that the matter of the processing of flaxseed for oil is quite essential apart from war. There is always a much greater demand in wartime, but it is essential at any time. That is one concrete example I gave. I said I thought those plants should be in the area where the flaxseed itself is produced. It would be much more economical. I was referring both to the letting of contracts and the furnishing of financial assistance to develop and expand industries in logical areas.


Mr. J. H. Dickey (Halifax):: I should like
to say, first of all, Mr. Speaker, that I do not think that the intervention of the Prime Minister (Mr. St. Laurent) was intended in any sense to limit or to cut off debate on this resolution. I think it arose rather out of the Prime Minister's recognition of the importance of the subject matter of this resolution and his desire to place before the house once again the attitude of the government on this highly important question.
I am tempted to deal at some length with the remarks made by the hon. member for Cape Breton South (Mr. Gillis) in introducing this resolution. I do not, however, wish to take up the time of the house in doing so; but I should like to make one or two remarks in general with respect to his approach to this problem. The hon. member for Cape Breton South said, at one point in his speech, that over the last few years arguments have come from his side of the house bringing to the government's attention the problem of decentralization of industry; and

he created the distinct impression that it was only from his side of the house that those arguments had come. The hon. member knows as well as do I and other hon. members of this house that that statement simply is not in accordance with the facts.
The hon. member also stated that he gained the impression that some people were getting tired of hearing maritime complaints. I have discussed the maritime point of view in this house on a number of occasions; and in my experience here I have heard many members putting forward the maritime point of view. I have also heard it discussed many times in private. But in my experience at least no one that I know of tires of hearing the maritime point of view being fairly and properly expressed at any time in this house or outside of it. However, a good many people-including, I think, the vast majority of maritimers-are exceedingly tired of hearing the maritime point of view put forward in an unfair, impractical and distorted manner, as we have heard it put forward here tonight by the hon. member for Cape Breton South.
Later on I shall deal with one or two points that the hon. gentleman raised. However, in view of the debate that has already taken place in this house during the last three or four weeks, it is perhaps not necessary for me to point out to you, Mr. Speaker, the number of occasions on which hon. members on all sides of this house and from all parties have placed before the house and the government consideration of the maritime point of view with respect to the decentralization of industry and with respect to the necessity for that point of view being given full consideration.
We have heard the Prime Minister this evening in a speech which I considered showed a great deal of spirit and a great deal of sincere belief in the future, in an industrial sense, of every part of this country, not just the central portions of it. It was a speech which I do not think was heated in the sense in which the leader of the C.C.F. group seemed to think it was heated; it was not heated in the sense of any irritation with the hon. member for Cape Breton South or anything of that kind, in my opinion; but was heated in his interest and belief in the future of this country.
We had in this house several days ago the statement made by the Minister of Trade and Commerce (Mr. Howe). He set out the policy of the government which I believe is one dictated by reason and, in its broad concept, by the fundamental interests of this country. The Minister of Trade and Commerce pointed out to the house that, as to defence purchases
Decentralization of Industry or production, for defence, the government were ready and anxious to use every single facility that exists in this country, whether it is located in the east, in the west or in the central provinces. Their sole interest is to get production and to get produced the things that are needed. In reply to specific questions I think he indicated to hon. members that if they knew of any facilities which were available and which were not being used, all they had to do was to bring them to the attention of his department and every effort would be made to employ those facilities.
Then there is the question of the creation of new facilities. The Minister of Trade and Commerce stated the policy of the government by saying that there was nothing that received more immediate or more careful attention that the possibility of facilitating the creation of an industry in the maritime provinces, unless it was a similar possibility of establishing a new industry in the prairie provinces. So far as the government is able to influence matters of this kind, I am satisfied that that is a sincere statement of policy that will be carried out.
In discussing this matter, Mr. Speaker, I do not think that we should lose sight of the fact that in many ways and to a large extent this question of the decentralization of industry and the wider expansion of new industry is a matter of self-help. It is going to be largely a matter of co-operative effort between private industry in the various parts of this country, provincial governments and the federal government. The expansion of industry, which is of the greatest value to the parts of this country that have not reached the stage of industrialization enjoyed by the central provinces, is that of private industry which is intended to serve not simply defence needs but the ordinary needs of the consumers of this country.
As hon. members know, the establishment of these industries depends very largely on the question of facilities, the availability of labour, materials and any advantages that location may give. I feel that, so far as the maritimes are concerned, in the past we have fallen down in emphasizing and making use of the location and other advantages that we enjoy. It is the fault of many individuals, of the attitude of many people in various industries, and that sort of thing, in the maritime provinces. But that is a difficulty which I believe is being overcome.
In the maritime provinces there is a new spirit of initiative in industry generally that is having a very good effect, and which will have a much broader effect in the days to come.

Decentralization of Industry
One of the considerations of overriding importance which we are going to have to face in the maritime provinces is the question of the provision of sources of power for new industry, if we are interested in seeing new industry established in those provinces. One of the great factors that made industrial development so concentrated in the central part of this country was the provision of adequate power facilities, and if we are to compete we must have those facilities ourselves.
The hon. member for Cape Breton South (Mr. Gillis) spoke of the number of small industries which existed in Nova Scotia in the days of confederation which have since disappeared. I am sure we all regret the passing of small industries of that kind, but I submit to him and to the house that his argument that the disappearance of these small industries was the result of confederation and the centralizing influences that took place after that time is hardly correct. The fact is, Mr. Speaker, that at the time of confederation it was a day of small industries. There were small industries of the type he mentions all over Ontario and Quebec and in the states of the United States; but with the development of better communication facilities and things of that sort, and the development of the economy, these small industries gradually became absorbed into larger industries. A similar argument could be made for various locations in other parts of the country which could not possibly be considered to be a result of confederation.
I should like to point out to him that these developments which took place were not all bad. The same forces that caused the smaller industries to be absorbed were the only forces that made it possible for the great development of the coal and steel industry in his own part of the island of Cape Breton. Without these additional or new means of communication, the railway and that sort of thing, that great industrial development would not have been possible. We might still have had a cotton mill at Yarmouth, or wherever it was, that he was referring to, but we would not have the great industrial development of his own area.
In addition, Mr. Speaker, the hon. member for Cape Breton South ended his argument by repeating something he had said on two occasions in his speech, namely, that nothing had been done. I submit that is the kind of argument that is objectionable, and which does not add anything to advance the cause that he has in mind in putting this resolution before the house. The fact is that a great deal has been accomplished. It is not exactly my idea of the best way of


improving a situation to submit that improvements which have taken place do not exist at all.
The other day the Minister of Trade and Commerce (Mr. Howe) mentioned in the house, and I have also mentioned in the house, the development of the Fairey Aviation Company (Canada) Limited at Eastern Passage in Halifax. That is very largely a defence industry, but it is located where it is only because of the kind of co-operative effort that I have referred to earlier, namely, the desire of this government to see any industry which could possibly be located in the east located there, the desire of the provincial government to see a new industry located in the province, and the desire of an industrial organization to seize certain real advantages which they saw in the situation, and which they found in that part of the country. Through that co-operative effort, and through taking advantage of those circumstances, we have a thriving and useful industry. I would also use the example of the plant of Cossor (Canada) Limited which has been established in Halifax, through the operation of the same circumstances, and which is developing very nicely. Therefore I submit, Mr. Speaker, that the hon. member for Cape Breton South does not do his cause any good, and he does not do the interests of the maritime provinces any good, by pretending that these accomplishments just do not exist.
The resolution reads:
That, in the opinion of this house, the government should give consideration to a program for the decentralization of industry-
And so on. This wording carries with it, I believe, the very kind of argumentation to which I objected in the speech of the mover of the resolution. It is clearly intended to create the impression: (1), that the government has not any program or policy, which is contrary to the statements of the Minister of Trade and Commerce (Mr. Howe) and the Prime Minister (Mr. St. Laurent); and (2), that nothing has been done along this line. I am unable to agree with this line of argument, Mr. Speaker, and I think that it would not serve the interests of industrial development in the maritime provinces or anywhere else in Canada for this house to pass a resolution which so clearly and intentionally carries these implications.


Alfred Johnson Brooks: Mr. Speaker, as the hon. member for Halifax (Mr. Dickey) has said, this subject has been debated in the house on many occasions. As a matter of fact I have spoken on a number of occasions about the decentralization of industry.

I am sorry I was not in the house when the hon. member for Cape Breton South (Mr. Gillis) spoke, but I have been assured that he put up a very able argument, as we would expect from him. Judging from the criticism which has come from the other side of the house, I am convinced that it must have been a most able presentation.
As the hon. member for Halifax has said, this matter has been discussed on many occasions; but as Mark Twain once said about the weather, it is talked and talked about, but there is never anything done about it. That is really what we in the maritime provinces are objecting to.
This evening I listened to the Prime Minister (Mr. St. Laurent) give us something of the history of the Hudson's Bay Company, and some other history of Canada. Well, history is very interesting indeed. I would point out that it was in the maritime provinces that history was first made in Canada. Unfortunately however it was in the early days, and today the people of the maritime provinces feel they cannot live on the history of the past. For instance, at the time of confederation the city of Saint John built more ships than any other port of the North American continent. It was at that time the fourth greatest shipping port of the world. In 1867 Saint John had a population of almost forty thousand, and today her population is not much greater. This fact alone speaks volumes about what has happened to the maritime provinces.
It is not my intention to go into detail, because those details have been mentioned many times. The fact remains however that those of us in the maritime provinces, and particularly in New Brunswick, are not receiving our full share of attention from this government, and have not from governments in the past.
The Prime Minister referred to bank presidents. I could tell him that not only bank presidents but also the heads of manufacturing concerns, educational leaders, ministers and the like have come from the maritimes and made their mark in other parts of Canada. We export the brains to run the business in Ontario and Quebec.
We would like to keep those people in our own part of the country. We want to have business down there, so that those people could look after our banks, our manufacturing, our industries and our educational institutions. A few days ago when discussing education I said that the maritime provinces are held up as a horrible example, so far as education is concerned. The reason is, of
Decentralization of Industry
course, that we have not the money with which to pay for education.
All that the people in our provinces are asking today is that they be given equal opportunity with the rest of Canada, so that they may educate their children, keep their young men at home, and be placed in the same position as other parts of Canada. That is all we are asking.
I was interested to hear what the leader of the C.C.F. had to say. He spoke about the depressed areas of Great Britain. I remember that in 1944 I happened to be in England, in company with Mr. Bracken. While there we met some of the members of Mr. Churchill's cabinet, and spoke particularly with Mr. Hugh Dalton who told us that at that time they were looking after the depressed areas in Great Britain. He said for instance that the people up in the Durham area and the people in Wales were not in as prosperous condition as those in other parts of the country, but that the government was going to move industry to those parts of Great Britain so that people in all parts of the country would enjoy the same privileges.
That is exactly what the people of the maritimes are now asking the government of Canada to do-and I believe it can be done. The hon. member for Halifax raised some of the objections as to why he feels we cannot have an equal share of industry. In this connection he mentioned the development of electrical power. It is true that the electrical power has not been developed to the same extent in New Brunswick, Nova Scotia and Prince Edward Island as it has been in other parts of Canada. I believe we have the facilities and opportunities there for the development of power. Given some assistance, I believe we could develop it and, with that electrical power, we could manufacture just as cheaply down there as it can be done in any other part of the country.
We have the raw material and we have the manpower. There is more idle manpower in the maritime provinces than in any other part of Canada. Today manpower is one of the greatest essentials, so far as manufacturing in this country is concerned. A few days age I was told of a New Brunswicker who opened a factory just outside Toronto to fill shells. He sent a team down to New Brunswick to round up men who would come back to Toronto to work in his factory. It does not require much electrical power to fill shells. That work could have been done in the maritime provinces, down near the city of Saint John, just as well as it can be done near Toronto. Further than that, if those shells are being prepared for use in Europe, to assist our
706

Decentralization of Industry allies over there in the event of war, then they must be shipped to Saint John or to Halifax to be sent overseas.
These are the things to which we object, Mr. Speaker. Then, a word about housing. I could show hon. members many vacant houses in our towns and villages in my own province. Those houses are deserted because the people are leaving. I am sure the minister will agree that housing in the maritime provinces is not as great a problem as it is around Toronto, Montreal or Hamilton, Why, then, should we take men away from their homes in the maritimes and bring them to Ontario and Quebec to do work, when that work could be done down by the sea, and the people would have decent houses in which to live.
The people of the maritimes are basing their fears of what may happen now on what happened during the last war. We were not given our just rights; there can be no question about that. Anyone who has read the Saint John Telegraph-Journal for the last two weeks will know that there have been editorials on the front page of that newspaper setting out the situation in that part of the world. They give a break-down of second war contracts for the different provinces to show the great injustice and the great inequalities there were during that war.
These figures show that in Prince Edward Island, with a population, according to the 1941 census, of 95,047, the amount spent per head on war contracts was $73.65; in Nova Scotia, with a population of 577,962, the amount spent per head was $509.55. They did fairly well. But in New Brunswick, with a population of 457,401, we received $172.70 per head.
Then, coming to Quebec, with a population of 3,331,882, the amount spent per head was $1,576.75 and in Ontario, with a population of 3,787,655, the amount spent per head was $1,435.35. 1 shall not give the figures for the other provinces. Those will be sufficient to show the picture during the last war. That is why the people in the maritime provinces today, realizing that there is not a state of war at this time, and realizing that possibly during the last war the government had to develop industry where the factories were located, are taking a keen interest in the matter. There is no great war on at the present time and it would be possible for the government to make a thorough survey of the maritime provinces and Canada generally, and that is all this resolution asks for. If they do that and if they have any intention to do justice to our part of the country they will find that we can manufacture two, three,


yes I would say even four times as much as we are at the present time. During the last war with four per cent of the population of Canada we had less than one-half of one per cent of the production.
I do not think it is necessary for me to press this point any further as it is quite clear. If the government is anxious to assist the people in these provinces, to keep them from moving to other parts of Canada, to provide them with money with which to carry on schools, churches and other services, they will pay more attention to them. They should act as they have acted in Great Britain where certain areas were treated as being more or less depressed.
Most hon. members from the maritime provinces sit on the other side of the house. There are only a few of us on this side, like the hon. member for Cape Breton South (Mr. Gillis), the hon. member for Cumberland (Mr. Black) and the hon. member for Queens and myself. I should like to hear the voices of all hon. members from the maritime provinces raised in this house as well as in their caucus so that something will be done to help this part of Canada.


Robert Ross (Roy) Knight: Mr. Speaker, this debate has taken on a rather salty flavour and I should like to take it away from the seashore and out to the prairies. The senior member for Halifax (Mr. Dickey) has left the impression, on me at least, that he considers this to be a political resolution of some sort. There are certain hon. gentlemen who see political motives under every bush. Personally I can see nothing political about this resolution. I am glad to hear that the senior member for Halifax is so happy about conditions in his particular part of the province. I notice the hon. member for Royal (Mr. Brooks) does not agree with him. I got into some trouble the other day with the hon. member for Saint John-Albert (Mr. Riley) when I suggested that a good many of the poor people in his town were certainly not living the life of Riley.
The Prime Minister (Mr. St. Laurent) has suggested that neither the provincial nor federal governments can do anything about the situation about which the hon. member for Cape Breton South (Mr. Gillis) has complained. I know my partisan political friends will accuse me of talking politics, but I should like to point out that there is one provincial government that has done something to promote industry within the province. These are only puny industries compared with the great industries in central Canada and some of my hon. friends will say that they have not all been particularly successful. As well as being successful some of them have

had success in that the mere creation of the industry has brought in private industries based upon the little industry started by the government.
There is at least something the federal government could do. Whether we are to have a state of war or whether we are to continue in a state of war preparedness the government has an obligation to see to it that great masses of material are manufactured. Many contracts will be awarded. While we are considering this question of the decentralization of industry may we hope that these contracts will be distributed with some degree of equality across the country.
I ask for that on two counts. First, these industries should be made as safe as it is possible to make them from potential enemy attack. Secondly, it is my opinion that no province should be depleted of its young men and women, as were some of the western provinces during the last war when their young people had to leave to go to Ontario and Quebec to get employment.
How is the government acting up to the present on this particular question? I should like to quote some figures which appear in Hansard of February 19, 1951. The hon. member for Moose Jaw (Mr. Thatcher) asked a question with regard to the contracts that had been awarded and how they were placed in the different provinces. He was referring to what might be called defence contracts. Then he went on to ask the dollar value of the contracts placed in each of the provinces. The parliamentary assistant to the Minister of Trade and Commerce (Mr. Mcllraith) answered that question as follows, and I quote from page 452 of Hansard:
Yukon and N.W.T	
$	254,059 24British Columbia	
33,574,746	46Alberta	
3,707,004	00Saskatchewan	
450,781	13Manitoba	
6,667,071	75Ontario	
214,436,014	47Quebec	
154,055,843	14New Brunswick	
5,468,998	37Nova Scotia	
23,003,602	68Prince Edward Island	
329,551	97Newfoundland	
402,518	39
It would look as though there may be something in the argument-


George James McIlraith: I wonder if the hon. member would finish reading the answer to the question?


Robert Ross (Roy) Knight: Would the hon. member like the total?


George James McIlraith: No. There is a point of order here. The hon. member has read a question and part of the answer as given in Hansard. I am sure he would wish the other hon. members to know the full answer.
Decentralization of Industry


Robert Ross (Roy) Knight: I shall read the paragraph at the bottom. My hon. friend might have waited until I had come to that particular place to see whether or not I was going to read it. He should have waited before he challenged me to read it. Why did he suspect that I would not read that particular paragraph?


George James McIlraith: The hon. member-


Robert Ross (Roy) Knight: May I have the floor? My hon. friend can make his speech later.


George James McIlraith: My hon. friend broke off and started-


Robert Ross (Roy) Knight: If my hon. friend wants to ask a question, let him ask it. If he has a point of order, let him put it to the Speaker and let the Speaker consider it. Who is making this speech?


George James McIlraith: On a point of order, the reason I broke in to raise a point of order earlier was that the hon. member had read a question out of Hansard, had read part of the answer and then started on with his speech and left out part of the answer.


Stanley Howard Knowles: No such thing. The hon. member did not start on at all till you broke in.


George James McIlraith: I have the question and answer before me. I have been well aware of it because it has been misused and misquoted by other persons in the last five days. I was particularly aware of it.


Robert Ross (Roy) Knight: On the point of order, I would; ask the hon. member to withdraw that statement. I was reading from page 452 of Hansard. I gave a list of the provinces and the amounts awarded in each case. I was busy at the moment, if my hon. friend had not interrupted me, with Newfoundland, $402,518.39. I am proceeding to read the rest of the answer.


Some hon. Members:: Hear, hear.


Robert Ross (Roy) Knight: Why the hon. member should have interrupted me in the midst of the figures with the assumption that I was not going to continue the answer I do not know. Perhaps my hon. friend would care to withdraw his assertion before I go further.


George James McIlraith: If the hon. member is
asking for a withdrawal I have no withdrawal to make. Hansard will bear out his interruption and his return to the subject matter of his speech when he had finished giving the figure for Newfoundland.


Robert Ross (Roy) Knight: I shall read the rest of the
answer. Personally I certainly do not understand what my hon. friend means.
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Decentralization of Industry


Clarence Gillis: He doesn't either.


Robert Ross (Roy) Knight: I doubt if he understands
himself.


Clarence Gillis: Hansard will bear that out.


Robert Ross (Roy) Knight: The total is $445,350,191.60.
Then the answer continues:
These figures do not necessarily include the value of stores produced in each province, since in many cases contracts are placed with the contractors' personal representatives or at a head office located outside the district where production actually takes place.
If that is the part of the answer my hon. friend wanted me to read I see no objection whatever to reading it. These are the facts with respect to the contracts that have been awarded in the last nine months. Before my hon. friend interrupted me I was suggesting that there was something that the federal government could do about it. I am interested of course, and I presume the Liberal members from Saskatchewan are interested although up to the moment they have not said anything about it, displaying that intelligent silence which is characteristic [DOT]of them in this house. I should like to hear from them on this particular question.
Merely looking at the figures, my calculation is that the figure for Saskatchewan is roughly one-tenth of one per cent of the total amount for the whole country. I know that we shall be told that our industrial equipment in the province of Saskatchewan is small. It is also small in some of the other provinces. I would suggest that my hon. friends from the maritimes did after all have some reason for complaint when one studies the figures I have read, notably those for Prince Edward Island and Newfoundland. They compare with the figure for Saskatchewan.
Having admitted that we have not very great industrial equipment we suggest that the federal government might have some responsibility to see that we expand our industrial equipment for the production of defence goods if such production becomes necessary. I do not know so much about the towns of Regina, Prince Albert or Moose Jaw but I do know something about my own city of Saskatoon. There is potential industrial production there that can be developed and encouraged. I hope that the industries now operating there and the Saskatoon board of trade will-I was going to say "pester" the government-at least apply to the government for some of the work that can be distributed across the country.
Someone mentioned the processing of oil from flaxseed. We have a co-operative factory in Saskatoon. I do not know whether


the government would hold anything against it in that regard. We have a great cooperatively owned milling industry, owned and operated by the wheat pool. We have two great private milling companies, Robin Hood and Quaker Oats. We have foundries and machine shops. We have at least a couple of concerns producing road machinery, bulldozers and machines of that kind. When a town has even that amount of industry to start with I suggest that the federal government, if they were as anxious as I am that industries should be started in the province of Saskatchewan, could do something about it in spite of what the Prime Minister (Mr. St. Laurent) has said.


Mr. George A. Drew (Leader of the Opposition):: Mr. Speaker, I wish to refer to one or two points that have been made with regard to the resolution. In doing so I need hardly remind hon. members that I speak as one living in one of the larger central provinces. This resolution simply states a proposition which has been put forward by several members of this party on a number of occasions.	During the present session and in
earlier sessions several of our members have emphasized the need for appropriate steps being taken to decentralize industry in Canada where that can be done. I can recall no occasion where it was suggested that this meant the moving of any industry from some place where it now exists, but rather that in the location of new industries, where the government had some influence in regard to the location of those industries, consideration should be given to the desirability of decentralization which would make it possible to employ the manpower available in many parts of the country to develop new types of production. I must confess that I am wholly incapable of understanding the vigour with which the Prime Minister (Mr. St. Laurent) took up this motion unless it was because of the badges I saw in the galleries tonight when he made his speech.


An hon. Member:: Nonsense.


Robert Henry Winters: Pretty cheap.


George Alexander Drew: Of course I know hon. members would not think any such thing could occur.


Robert Henry Winters: But you would.


George Alexander Drew: The fact remains that his speech was one that had little or no relation to the motion before us. We had a very glowing dissertation on the gentlemen adventurers of the Hudson's Bay Company and other gentlemen adventurers. Of course we are now in a period when gentlemen adventurers must call on the Minister of Trade and Commerce (Mr. Howe). It is of these new gentlemen adventurers, and the places where their

activities will be carried out, that perhaps some members are now thinking when they make the suggestion that if the government is serious in its statements about the dangers of concentration of industry from the point of view of civil defence then that danger should be recognized in the location of industry with which it will have a great deal to do.
The idea that these decisions are made by those engaged in the speculative activities of private enterprise only goes so far at a time like this. I have really been astonished at the touchiness of one hon. member with respect to the question and answer recorded at pages 451 and 452 of Hansard. There is no reason why any member of the house has to do more than refer to the total figures, if that is what he wants to do. The total figures of contracts awarded are given and they show a perfectly clear situation. The question asked had to do with how many of the 80,000 contracts awarded in the first nine months of the current fiscal year had been awarded to the different provinces. The provinces are set out, and the simple fact is that, according to the figures given, $368,491,857.61 of the total of $445,350,191.60 went to the two central provinces. That amounts to 83 per cent of these contracts. The words about which the hon. member, who has interrupted on several occasions, seemed so concerned are these:
These figures do not necessarily include the value of stores produced in each province, since in many cases contracts are placed with the contractors' personal representative or at a head office located outside the district where production actually takes place.
That does not affect the fact that 83 per cent of the dollar value of these contracts went to the two central provinces.


George James McIlraith: It changes it very materially.


George Alexander Drew: As a member from one of these central provinces it does seem to me this is a remarkable disproportion, in view of the fact that payment for these contracts will be made by the taxpayers right across the country, in proportion to their capacity to pay. I am satisfied that none of the people living in the central provinces will disagree with the idea that, to the extent to which public funds can be properly allocated in a proportionate manner, that should be done.
This deals with contracts in regard to a number of items which may or may not relate to industrial development. In this country we have come into a period that we should recognize for what it really is. Again the government is in a period of very heavy spending. We have the Canadian Commercial Corporation; and Bill No. 77, respecting the department of defence production, is now
Decentralization of Industry before the house. That will be under discussion at the appropriate time, and I do not propose to make any comments now. However, I would point out that this bill gives extremely wide powers to the government to determine where enormous sums of public money will open up new industrial development in Canada. All this resolution does is place before this house the desirability of decentralizing industry, and obviously that can only apply in those cases where the government has some influence over what takes place. But may I suggest that the power of the government to determine where industry shall be located goes far beyond those crown corporations and other crown agencies which may be set up under this defence production board. Every hon. member of this house who is a realist knows perfectly well that today the government has very substantial influence on where any company will open up. This government, which believes so much in warnings and in suggestions, with stand-by legislation not to be exercised unless somebody does not do what he is told, has tremendous power to suggest where industry shall locate if it is to get steel and other supplies which are under some measure of control already.


Some hon. Members:: Wrong page.


George Alexander Drew: I hear some hon. members saying "Wrong page". There are so many examples of the extent to which this government has within its hands to control the destiny of Canada, without any measure of actual supervision by parliament, that it is just about time for the members of this house to decide whether in fact we have a dictatorship or responsible government. If some hon. members would listen to the parliamentary principles which have been expounded in this house by one of their own number, the hon. member for Quebec South (Mr. Power), who I hope will be repeating some of those basic principles elsewhere in this city this evening or some other time during the next day or two, they might begin to assert some of those basic truths which were supposed to be part and parcel of the name Liberal. As it stands at the moment the only thing that seems to be Liberal about this party is its liberal expenditure of public money without affording parliament any opportunity to decide how that money is going to be spent.
The suggestion of innocent lack of authority over industry would almost seem to indicate that the government thinks memories are very short. Some people here will remember the annoyance expressed by the Minister of Trade and Commerce (Mr. Howe) in different ways when some time was spent

Decentralization of Industry last year in determining where certain pipe lines were to go. That was a matter under the authority of this government; and those pipe lines will have a great deal to do with where certain industries will be located. Some hon, members will recall that one of the iron developments mentioned here this evening, Steep Rock, has had a great deal of assistance from the government. I am not questioning the value of that development, but most certainly this government had something to do with how that ore was to be shipped) and delivered. This government has evolved a system which places a very real restraint upon the freedom of risk capital in deciding exactly where some of it will go. I do not suggest for one moment that many will not determine and insist upon determining where they shall go; but others, from the very nature of the enterprise in which they are going to engage, most certainly will be guided by the gentle suggestion of the Minister of Trade and Commerce as to what would be most acceptable to the government.
Then other hon. members will recall that in the last world war very large sums of money were spent by this government on the construction of one of the largest electrical power-producing plants in Canada. I am not entering into any debate now as to the merits or otherwise of the ultimate disposition of that plant, but certainly the government has a good deal of influence over where some of these developments take place. And I would point out that electrical energy is available for development in many parts of this country, including the maritime provinces. This is particularly true of our newest province, Newfoundland. There are immense undeveloped water resources in that province which, if developed under plans similar to those put into effect elsewhere in Canada, could be used by great industries at tidewater, using raw materials coming by ship from other parts of the world and shipping the finished products to the places in Canada and
outside where they might be required. In the maritime provinces, in addition to water resources available for development, there are also coal resources from which electricity can be produced in very large quantities.
I am not in any way confining my thoughts to the maritime provinces. Right across Canada there are great opportunities for using our power resources to open up new industry and distribute the concentration of population in exactly the way that has been urged by those engaged in civil defence activities. Either there needs to be some reconciliation between the point of view of the government and the agencies dealing with civil defence, or this resolution should be acceptable to the government because it is the very thing civil defence agencies have been urging. I do suggest that this resolution, far from condemning the government, simply states a proposition which every hon. member of this house could well support, with the idea of spreading the population of this country, decentralizing concentration of population, employing those who are now living in areas where employment is not to be found in the way that it should be, and generally strengthening the whole economy of Canada.
On motion of Mr. McLure the debate was adjourned.



BUSINESS OF THE HOUSE

Alphonse Fournier: Tomorrow being government day we shall proceed with the resolution to introduce a bill to amend the Indian Act; then we shall consider Bill No. 24, to confer certain emergency powers upon the governor in council. Having disposed of those two items we shall take up, but I cannot indicate in what order, Bill No. 5, Bill No. 6 and Bill No. 76.


[Stage Direction]
It being five minutes after eleven o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Tuesday, February 27, 1951